Chapelton v Barry UDC [1940] 1 KB 532

Facts

• Mr. Chapelton hired a deck chair from Barry Urban District Council (BUDC) at a beach, where deck chairs were displayed with a notice stating hire costs (two pence for three hours).
• Upon payment, Mr. Chapelton received a ticket from the attendant.
• The ticket contained an exclusion clause stating the council accepted no responsibility for injuries from use of the chairs.
• After sitting, Mr. Chapelton suffered injury when the chair collapsed.
• Mr. Chapelton brought a negligence action against BUDC.
• The main dispute was whether the exclusion clause, found on the ticket received after payment, was incorporated into the contract and thus protected BUDC from liability.

Issues

1. Whether the display of deck chairs and accompanying notice constituted an offer or merely an invitation to treat.
2. Whether the terms, particularly the exclusion of liability clause printed on the ticket, were incorporated into the contract.
3. Whether providing contractual terms after contract formation is sufficient for incorporation.
4. Whether BUDC could avoid liability for negligence based on the exclusion clause on the ticket.

Decision

• The Court of Appeal found that the offer was made by the display of the chairs and notice; acceptance occurred when Mr. Chapelton paid.
• The contract was concluded at the time of payment, prior to the receipt of the ticket.
• The ticket was deemed a mere receipt, not a contractual document.
• The exclusion clause was not incorporated into the contract and therefore did not protect BUDC from liability for Mr. Chapelton’s injury.

Legal Principles

• Terms, including exclusion clauses, must be presented before or at the time the contract is formed to be incorporated.
• A ticket received after contract formation, unless explicitly identified as contractual, is generally considered a receipt.
• The method and context of display can determine whether an action constitutes an offer or invitation to treat.
• Incorporation of terms requiring careful communication, particularly where terms are unexpected or limiting liability.
• Legislative frameworks such as the Unfair Contract Terms Act 1977 and other statutes regulate fairness and reasonableness of exclusion clauses, especially in business contexts.
• Implied terms under statutes (e.g., Sale of Goods Act 1979, Supply of Goods and Services Act 1982) may not be excluded without satisfying statutory requirements.

Conclusion

Chapelton v Barry UDC demonstrates that contractual terms must be effectively communicated before or at the time of contract formation for incorporation. The exclusion clause on the ticket was not binding, as the contract had already been concluded at the point of payment, and the ticket functioned merely as a receipt. The case reinforces the necessity of clarity and fairness in presenting contractual terms, especially those limiting liability.