Regular readers will know that T&C clauses that (supposedly) limit CSP liability are very important. If you don’t get them right, you can be exposed to unnecessary legal risk.
Worse, you may commit a criminal offence under the Trade Practices Act – of misrepresenting peoples’ legal rights.
Dodo’s most recent brush with the law caused us to take a look at its ‘liability limitation’ clause. All we can say is ‘Wow !’ What planet’s legal system generated this weird stuff ?
First, a refresher
Before we go any further, let’s re-read an earlier article about liability limitation.
Next, take a look at Dodo’s clause
As Your service is provided to You for the primary purpose of personal use, We do not accept liability for losses that result from the use of Your service in connection with the conduct of a business.
We are liable to you for breach of contract or negligence.
However, We will accept that liability if it cannot be excluded under any legislation.
If that liability cannot be excluded but can be limited under any legislation, We limit Our liability to resupplying, repairing or replacing the relevant goods or services, or payment of the cost of resupply, repair or replacement, where it is fair and reasonable to do so.
What did they get wrong ?
Umm, this is a hard call. Which do you rank first … the potential criminal offence or the apparent omission of the word ‘not’ ?
Let’s start with the potential offence
The statement that ‘As Your service is provided to You for the primary purpose of personal use, We do not accept liability for losses …’ is bizarre. From our earlier article, you’ll understand that the ‘primary purpose’ of supply is as relevant as Dodo’s left foot. Dodo can’t deny liability for a service it provides on that basis.
It just isn’t lawful to (try and) do that in Australia.
And trying to do it may breach section 53(g) of the Trade Practices Act: ‘A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods … make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy.’
Section 75AZC of the TPA goes on to make that an offence … with a maximum penalty of over $1 million.
Now let’s look at the ‘not’ problem
It’s pretty obvious that Dodo did not mean to say ‘We are liable to you for breach of contract or negligence.’ The next sentence reads: ‘However, We will accept that liability if it cannot be excluded under any legislation.’ You don’t begin a sentence with ‘However, we will accept that liability’ when the previous sentence already says ‘We are liable to you for breach of contract or negligence.’
It looks like some careless dork has left out ‘not’. Maybe it was intended to say ‘We are not liable to you for breach of contract or negligence.’ Then it would make sense for the next sentence to begin with ‘However, We will accept that liability …’.
And there’s a second, different liability clause in the same document
We won’t dwell on it, but there’s a second clause about liability that works differently. It also mis-states the law, though.
Our take on it
If anyone takes Dodo on in court, claiming heavy losses, the company will have to rely on a court reading this mish-mash with sympathy. Good luck, Dodo.
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