is an

English contract law English contract law is the body of law that regulates legally binding agreements in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the Industrial Revolution, it shares a heritage with countries ...

and

English property law English property law is the law of acquisition, sharing and protection of valuable assets in England and Wales. While part of the United Kingdom, many elements of Scots property law are different. In England, property law encompasses four main t ...

case on exclusion clauses and

bailment Bailment is a legal relationship in common law, where the owner of personal property ("chattel") transfers physical possession of that property to another, who holds the property for a certain purpose, but retains ownership. The owner who sur ...

. It is best known for

Denning LJ Alfred Thompson Denning, Baron Denning, (23 January 1899 – 5 March 1999), was an English barrister and judge. He was called to the Bar of England and Wales in 1923 and became a King's Counsel in 1938. Denning became a judge in 1944 when he w ...

's "red hand rule" comment, where he said,

Facts

J Spurling Ltd had a warehouse in East London. Mr Andrew Bradshaw had seven barrels of

orange juice Orange juice is a liquid extract of the orange (fruit), orange tree fruit, produced by squeezing or reaming oranges. It comes in several different varieties, including blood orange, navel oranges, valencia orange, clementine, and tangerine. As ...

. He asked Spurling Ltd to store them. In the contract was the "London lighterage clause" which exempted warehousemen from liability due to their

negligence Negligence ( Lat. ''negligentia'') is a failure to exercise appropriate care expected to be exercised in similar circumstances. Within the scope of tort law, negligence pertains to harm caused by the violation of a duty of care through a neg ...

. When the barrels were collected, they were damaged. When Bradshaw refused to pay Spurling Ltd, the company sued for the cost. Bradshaw counterclaimed for damages for breach of an

implied term A contractual term is "any provision forming part of a contract". Each term gives rise to a contractual obligation, the breach of which may give rise to litigation. Not all terms are stated expressly and some terms carry less legal gravity as t ...

of a contract of bailment to take reasonable care.

Judgment

, Morris LJ and Parker LJ held that although the warehouse employees were negligent, the clause effectively exempted them. Denning LJ's judgment went as follows. Note that his reference to the concept of a fundamental breach precluding an exclusion of liability was rejected by the House of Lords some years later in '' Photo Production Ltd v Securicor Transport Ltd''

980 Year 980 ( CMLXXX) was a leap year starting on Thursday of the Julian calendar. Events By place Europe * Peace is concluded between Emperor Otto II (the Red) and King Lothair III (or Lothair IV) at Margut, ending the Franco-Germa ...

AC 827.

Reception

Denning's "red hand" phrasing—and the idea that particularly onerous clauses (including but not limited to exclusion clauses) need sufficient notice if not incorporated by signature (or other means) has been widely referred to in a number of significant English cases subsequently including '' Thornton v Shoe Lane Parking Ltd'', and '' Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd''. The Court of Appeal questioned the wide applicability of it in the case of ''AEG (UK) Ltd v Logic Resource Ltd'' (in part as the

Unfair Contract Terms Act 1977 The Unfair Contract Terms Act 1977 (c. 50) is an act of Parliament of the United Kingdom which regulates contracts by restricting the operation and legality of some contract terms. It extends to nearly all forms of contract and one of its most ...

provided a statutory relief from unfair terms), but it was cited with approval in ''Lacey's Footwear v Bowler International''. 9972 Lloyd's Rep 369

Notes

{{reflist, 2 English property case law 1956 in England Lord Denning cases English incorporation case law Court of Appeal (England and Wales) cases 1956 in case law 1956 in British law