Exclusion Clauses, also known as Disclaimers of liability, are terms which excuse a product or service provider from liability for a wrong affecting a customer or other interested party, in circumstances where liability would otherwise lie. The current focus on disclaimers in today’s consumer transactions, arises as a result of the increasing willingness of the courts to find in favor of consumers who have sued companies for seeking to rely on disclaimers of which the consumer had no prior notice. One common argument in this regard is that had the consumer been properly notified he or she may have chosen not to utilize the service or buy the good had they known of the exclusionary terms being imposed by the company. Transactions over the Internet are no different and, in fact, customers more often ignore the Terms & Conditions including disclaimers on websites than those in print. What risks exist when customers blindly agree to website terms and waive their rights to sue in the event of a breach of privacy or other violations? Will the Courts uphold a disclaimer which is fundamentally unjust as long as the company can prove the customer’s agreement to the Terms & Conditions?

Though disclaimers usually form a small part of extensive website terms and conditions and privacy policies, special attention is brought to these specific provisions either by being in block capitals or bold font. Basic disclaimers seek to excuse the provider from libaility in the event that a customer’s personal and financial information becomes compromised due to hacking, viruses, malfunctions or dissemination. Many disclaimers limit any liability to a specific sum, for example US$100 or a sum no more than what the disgruntled customer has spent over the last 12 months with that business. It is understandable that businesses will ensure that they are as highly protected as possible from the many potential system breaches caused by third parties and other malfunctions of the Internet which endanger the integrity of the systems upon which these businesses rely. A disgruntled customer would be unable to successfully argue that he/she was not aware of the disclaimers unless the business made the critical error of not seeking the agreement of the customers to their terms, usually done by ticking a checkbox at registration.

However, the law will always preserve the rights of the vulnerable and in circumstances where the courts identify a level of harshness and inequity in the terms, the disgruntled customer will benefit from a higher level of protection than the business. In the same breath, the court will not reward the customer’s blatant ignorance of the disclaimers and will examine the Terms & Conditions and the disclaimers in the context of fairness and limit the interpretation and weight of those provisions based on whether they aim to remove rights from the customers which under law cannot be waived or removed, even by the customer himself/herself.

If upon the Court’s interpretation, it is found that the terms in question are unenforceable, they will be excluded from the applicability of the contract thus allowing the customer to seek remedies from the business for the breach of privacy that has occurred due to negligence in providing or an omission to provide secure processes for business transactions.

Marissa Longsworth is an Attorney-at-Law at the Kingston-based business law firm Cheeks & Co. To contact Marissa please do so via email to clientsupport@cheeks-co.com