Olley v. Marlborough Court Ltd

Facts

• Mrs Olley was a resident at the Marlborough Court Hotel
• She checked in and paid at the reception desk (contract formed here)
• In the hotel bedroom, on the back of the door, a notice stated: "The proprietors will not hold themselves responsible for articles lost or stolen unless handed to the manageress for safe custody"
• Mrs Olley's fur coat was stolen from her room
• The hotel relied on the exclusion notice to avoid liability

Issue

1. Whether an exclusion clause displayed in a hotel bedroom, seen only after the guest has contracted at reception, is incorporated into the contract?

Held

• The Court of Appeal held for Mrs Olley: the exclusion clause was not part of the contract
• The contract was concluded at the front desk when the guest booked and paid
• The notice on the bedroom door was only encountered after contract formation
• A term cannot be incorporated into a contract after the contract has already been made
• The hotel was liable for the stolen coat

Ratio Decidendi

For an exclusion clause to be incorporated into a contract, it must be brought to the attention of the other party before or at the time of contracting. A clause communicated after contract formation, however prominently displayed, cannot become a term of that contract. The question of timing is decisive: when was the contract formed, and was the clause known to the other party at that point?