Mr Greenlees, the owner of a Jaguar Sovereign, had parked his car in an unattended car park in Hamilton when it was struck by another vehicle, causing significant damage. Mr Greenlees had insured his car on a fully comprehensive, like-for-like basis and so when his broker sent him a 2.7 Jaguar diesel worth approximately £40,000, Mr Greenlees assumed that this was his replacement car. He accepted delivery and signed a document which he believed to be an acknowledgment of receipt. This document was in fact a credit hire agreement.
According to the terms of the agreement, the Jaguar was to be hired at a daily rate of around £350. Mr Greenlees had access to the hire vehicle for 103 days, incurring costs of just over £36,000. This was almost the full value of the car.
Mr Greenlees argued that if he had known the car had been provided on a credit-hire basis, he would never have entered into the agreement and would not have accepted delivery. It was his understanding that the car had been provided by his insurance company, in accordance with the terms of his policy, and that he would bear no responsibility for the costs.
Decision
In the Court of Session Lord Matthews accepted that Mr Greenlees had not read the terms of the agreement properly and was, therefore, not aware that it was a car hire agreement. Nevertheless, the judge ruled that, as Mr Greenlees had signed the contract, he was bound by its terms. However, given that Mr Greenlees' Jaguar Sovereign was 'written off' as a result of the collision, the judge considered that he would be entitled to some compensation for the loss he suffered and would indeed be entitled to a replacement car for a reasonable period. In the Court's view, 103 days hire was wholly unreasonable. Instead, 43 days was deemed reasonable in the circumstances.
The Court then considered the rate of daily hire. It decided that the cost to be recovered from the insurance company should be an average daily rate, less than the hire agreement amount of £350 per day.
Mr Greenlees recovered £7,500 from the insurance company. However, he was liable to pay the remaining £28,000 of the car hire bill.
Comment
The message is clear – always check the small print on any document before you sign, or take advice if you are unclear. Please click here for the full Court judgment.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
