A recent judgment by the Supreme Court of Appeal (SCA) has clarified the requirements that must be satisfied before a party can rely on contractual disclaimers to exclude delictual liability. The SCA held that the party seeking to rely on such exclusions bears the onus of proving they were validly concluded, properly disclosed, and compliant with applicable statutory requirements. Where those threshold requirements are not met, the Court held the exclusions do not form part of the contract and cannot affect liability.
On 27 January, the SCA dismissed an appeal by Tourvest Holdings (Pty) Ltd, trading as Drifters Adventours, which sought to rely on a brochure disclaimer and an indemnity signed by a third party to avoid delictual liability for personal injuries sustained by Anu Rekha Murti (the respondent).
The Court held that Tourvest failed to establish that either disclaimer formed part of a binding agreement with Murti, that the terms were brought to her attention with sufficient prominence, or that the requirements of the Consumer Protection Act (CPA) had been met.
Although the case was decided as a delictual dispute between the parties, the Court’s reasoning turns on principles governing the legal effectiveness of exclusionary terms, including proof of authority, adequacy of notice, and compliance with statutory disclosure obligations. The judgment therefore clarifies the circumstances in which contractual disclaimers will, as a matter of law, fail to exclude liability.
Factual context accepted by the SCA
The SCA accepted that Murti was injured after falling from a moving safari vehicle during a guided southern African tour. It accepted that Tourvest had modified the vehicle to include rear lockers and promoted those lockers as accessible to passengers while the vehicle was in motion. Murti instituted a delictual claim alleging negligence in the maintenance of the vehicle, a failure to warn of danger, misrepresentation as to safety, and negligent driving by Tourvest’s employee.
Tourvest pleaded it had contracted out of liability by virtue of two disclaimers: one contained in a brochure provided before the tour, and another contained in an indemnity form completed and signed by Murti’s partner.
The High Court in Johannesburg separated the issue of the disclaimers from the merits of the delictual claim and held that Murti was not bound by either. Tourvest appealed that determination to the SCA.
Authority and formation of the alleged exclusion
The SCA held that Tourvest bore the onus of proving the conclusion of a valid contractual exclusion of liability. On the facts, the Court upheld the High Court’s findings that Murti neither signed nor knew of the indemnity form, and her partner was not authorised – actually, tacitly, or ostensibly – to sign it on her behalf.
The Court rejected Tourvest’s reliance on agency principles, holding there was no evidence that Murti had authorised her partner to bind her to an exclusion of liability, nor any representation by her that could find ostensible authority. The doctrines of quasi-mutual assent and the so-called “ticket cases” were also held to be inapplicable, because Murti made no representation by conduct that she had assented to the exclusionary terms.
Crucially, the Court went further in identifying responsibility for the failure to conclude a binding exclusion. It held that Tourvest “only has itself to blame” for not ensuring that a valid indemnity agreement was concluded with Murti. The Court emphasised that Tourvest’s own documentation contemplated the conclusion of separate, self-contained agreements with each tour participant, and it was incumbent on Tourvest to ensure this occurred.
The SCA stated this obligation should not be approached casually, and a proper process would have required close supervision by a Tourvest representative and verification that each indemnity was signed by the participant whose details appeared on the form. In the absence of such measures, the Court held that no exclusionary agreement came into existence between Tourvest and Murti.
Adequacy of notice and prominence
The SCA held that a disclaimer relied upon at common law must be displayed with sufficient prominence to reasonably come to the attention of the person against whom it is to be enforced. It found that the brochure disclaimer relied upon by Tourvest was not displayed with sufficient prominence.
The Court held that the placement of the disclaimer under an “Insurance” heading did not reasonably alert a reader to a material exclusion of delictual liability. It further held that the wording contemplated that a separate, future indemnity would still have to be concluded before the tour commenced, indicating that the brochure disclaimer was not intended to operate independently.
The indemnity form containing the second disclaimer was found not to have come to Murti’s attention at all. The Court held that the suggestion that Murti should be taken to have agreed to undisclosed exclusions merely by embarking on the tour could not be elevated to a contractual exclusion of liability. The appeal therefore failed at a preliminary level.
Application of the CPA
The SCA rejected Tourvest’s argument that the CPA did not apply because booking and payment occurred outside South Africa. It held that the agreement concluded by Murti’s partner conferred a benefit on Murti as a third-party beneficiary, and the consumer relationship between Tourvest and Murti crystallised in South Africa when she presented to commence the tour.
The Court held that the disclaimers formed part of a consumer agreement, and the CPA therefore applied. Applying sections 49 and 58, the Court held that Tourvest failed to draw the nature and effect of the liability-limiting provisions, and the risks involved, to Murti’s attention in the manner required by the statute. That failure entitled the Court to treat the disclaimers as having no force or effect.
Interpretation of the disclaimer wording
Although unnecessary to its primary conclusion, the Court considered whether the disclaimers, if binding, would have excluded liability for the negligence alleged by Murti. It reaffirmed that exemption clauses must be construed restrictively, and ambiguity must be resolved against the drafter.
The Court held that the brochure disclaimer was too vague and general to constitute an unequivocal exclusion of liability. It further held that the wording did not expressly exclude liability for negligence, and in particular did not exclude liability for the negligent driving of a Tourvest employee. Absent clear and unequivocal language, the disclaimer could not exclude liability of the kind alleged.
Public policy considerations
The Court observed that if it had been necessary to decide the matter on public-policy grounds, it would have been inclined to find an exclusion of liability unenforceable where Tourvest expressly promoted conduct that created the very risk that materialised. The Court emphasised that contractual provisions that are unreasonable, unfair, or contrary to constitutional values may be unenforceable as being contra bonos mores.
Conclusion
The SCA dismissed Tourvest’s appeal with costs. It did so on the basis that Tourvest failed to prove, at a threshold level, that any exclusion of liability formed part of a binding agreement with Murti, that the exclusions were adequately disclosed, or that the statutory requirements of the CPA had been met. The judgment confirms that where those foundational requirements are absent, liability remains unaffected by the wording of the disclaimers relied upon.
Implications for the insurance market
Mtho Maphumulo, a senior associate in the dispute resolution department at Adams & Adams, says the judgment has material implications for the insurance market.
For insurers, the decision reinforces that liability exposure remains where suppliers fail to comply with the provisions of the CPA. “Policy drafting and underwriting for tour operators, hospitality, and adventure providers must anticipate that broadly phrased brochure disclaimers will not suffice,” Maphumulo said in a commentary.
For brokers, placement advice to clients in the travel/adventure sectors must emphasise robust risk warnings that meet the CPA’s standards and processes that secure each participant’s signature or recorded assent, he said.
