4. Exemption Clauses Flashcards
L’Estrange v Graucob
Party bound by signature, even if he hasn’t read doc
Curtis v Cleaning
Party maybe prevented from relying on incorporation through signature of doc if he has already misrepresented meaning of clause to other party
Grogan v Robert Meredith
Signature will not incorporate exemption clause if doc signed doesn’t have contractual effect
Parker v SE Railway
Cloakroom ticket which on front says ‘see back’ and on back excludes liability for loss of item worth more than £10 amounts to valid exemption
Thompson v LMS Railway
Similar facts, but on reverse instead of containing exclusion, state ticket issued subject to standard conditions set out in railway timetable
Still held to be valid
Harvey v Ventilatorenfabrik
Contract written in German and exclusion clause inserted without other party’s knowledge
Not valid
Henderson v Stevenson
Where doc does not have clear words on face of it directing attention to exemption clause on the reverse, it is unlikely that such a clause will be incorporated
Sugar v LMS Railway
If there are clauses that had been rendered illegible, e.g. by a date stamp, it is unlikely that they will be deemed incorporated
Interfoto v Stiletto
Onerous term will not be incorporated into contract merely by being included in the standard printed contract
Spurling v Bradshaw
Terms that are particularly onerous should be drawn to attention of other party by special note or by printing them in red ink
McCutcheon v MacBrayne
Course of dealing must have been consistent over period of time
Hollier v Rambler
3-4 transactions over 5 years insufficient
Kendall v Lillico
3-4 times per month over 3 years sufficient
Olley v Marlborough Hotel
Reasonable notice of exemption clause must be given before or at time of contracting
Thornton v Shoe Lane Parking
Reasonable notice of exemption clause written on back of ticket issued by machine not given before or at time of contracting
Chapleton v Barry UDC
Exemption clause is not incorporated into contract if doc in which it is contained is not one that could reasonably be expected to have contractual force
Andrews Brothers v Singer
Contra proferentem rule
Alisa CraigFishing v Malvern Fishing
Contra proferentem rule applied with less rigour when clause merely limits rather than excludes liability
Canada Steamship v R
- Does the clause expressly mention negligence (or a close synonym - Monarch Airlines v London Luton Airport)
- Are the words used wide enough?
- Are the words used too wide?
UCTA 1977, s 1(3)
Applies only to business liability
UCTA 1977, s 2(1)
Liability for personal injury/death arising from negligence cannot be excluded
UCTA 1977, S 2(2)
Loss/damage arising from negligence can only be excluded if it satisfies the requirements of reasonableness
UCTA 1977, s 11(1)
Requirement is that term should be fair and reasonable one, having regard to circumstances which were, or ought reasonably to have been, known to the parties when the contract was made
UCTA 1977, s 11(5)
Burden of proving reasonableness lies with party claiming that contract or notice satisfies the requirement of reasonableness
UCTA 1977, Sch 2
Guidelines for assessing reasonableness
Strength of parties’ bargaining positions
Whether customer knew, or ought reasonably to have known, of existence of term
Etc.
George Mitchell v Finney Lock Seeds
Significant degree of judicial discretion in establishing reasonableness
UCTA 1977, s 6(1)
Liability for seller’s implied undertakings as to title cannot be excluded
UCTA 1977, S 6(2)
Liability for breach of obligations arising from SGA 1979, ss 13, 14 and 15 cannot be excluded against person dealing as a consumer
UCTA 1977, S 6(3)
For non-consumers, these obligations can be excluded where term satisfies the requirement of reasonableness
UCTA 1977, S 12(1)
Person deals as consumer when
(a) he doesn’t contract in course of business
(b) other party does make contract in course of business
(c) goods are of type ordinarily supplied for private use/consumption
UCTA 1977, S 3(2)
Not possible to exclude/restrict liability for breach of contract
Reg 4(1)
Regulations apply to unfair terms in contracts concluded between seller/supplier and consumer
Reg 5(1)
Regulations apply only to terms that have not been individually negotiated
Term is unfair if, contrary to requirements of good faith, it causes significant imbalance in parties’ rights and obligations arising under contract, to detriment of consumer
Sch 2
Provides non-exhaustive list of unfair terms
E.g. Requiring any consumer who fails to fulfil obligations to pay disproportionately high sum in compensation
DG of Fair Trading v First National Bank
Requirement of good faith is one of fair and open dealing
Terms should be expressed fully, clearly and legibly
Seller/supplier should not take advantage of consumer’s necessity, indigence, inexperience, weak bargaining position
Imbalance is where term is weighed in favour of supplier such as to tilt parties’ rights and obligations
Reg 6(2)
Requirement of fairness shall not relate to
(a) definition of main subject matter of contract
(b) adequacy of price or remuneration
Office of Fair Trading v Abbey National
Charges levied by banks for overdrawn accounts are held to be part of price/remuneration for banking services provided and thus no assessment of the fairness of those times may be applied
Reg 7(1)
Written term must be expressed in plain, intelligible language
Reg 7(2)
In case of ambiguity, interpretation most favourable to consumer shall prevail
Reg 8(1)
If term is unfair, it shall not be binding on consumer
