Breach Of Contract, misrepresentation, Remedies, Terms and Exemption Clauses Flashcards
What is an exemption clause
Seeks to exclude or limit liability where breach of contract or tort committed
Common law rules on incorporating exemption clauses
1 must be contractual in nature - reasonable person must think it was - chapelton v Barry urban district council 1940 - deck chair ticket
2 incorporated by signature - if you sign document with clause likely incorporated - l’estrange v. Graucub ltd 1934
3 exceptions to 2 are misrepresentation, document not contractual, not legible
Basic common law rules on exemption clauses
Exemption clause must be incorporated to contract
Construction of clause must cover breach of contract and the loss/damage which occurred
Common law rules on incorporating exemption clause - no signature
Innocent party must know of clause
Or
Party relying on clause must have take steps to bring clause to others notice before contract finalised - Parker v south eastern railway 1877
Onerous or unusual clauses
The attention of the other party must be drawn to it
Thornton v shoe lane parking ltd 1971 - clause re. Personal injury odd no attention drawn to it
Incorporated by previous consistent course of dealings
Sold notice sent
Kendall (Henry) and sons v lillico and sons ltd 1969 - sold notice sent to buyer many times with exemption clauses after sale, therefore incorporated
Construction of exemption clause
Wording must cover situation
Contra proferentem rule
Case and statute
Where party tries to rely on a clause that is ambiguous or unclear courts will rule in favour against party who put forward
Houston v trafalgar insurance 1954 - car insurance re load not people
CRA 2015 - meaning most favourable to consumer will prevail if different meanings
Exemption clauses and negligence
Three stage test laid down in Canada steamship lines ltd v r 1952
- If the clause expressly exempts the party from liability for negligence effect will be given and liability excluded
- If no express provision court must decide if words are wide enough and if so 3 required
- Court must determine if clause could cover liability other than negligence such as strict liability. If so clause will be restricted to other liability and not cover negligence.’
Unfair contract terms act 1977
What is it
Only applies to non consumer contracts
Either renders clause void or subjects to reasonableness test per s11 and Sch 2
UCTA 1977 - process to determine validity - negligent breach
Identify breach - negligent breach / ex. S 13 Sgsa 1982
Which section applies - s2 UCTA
Effect of that section s2(1) if death or personal injury void
S2(2) loss/damage valid if reasonable
UCTA 1977 - process to determine validity - breach of implied terms s13 - 14 Soga 1979 or s 3-4 Sgsa 1982
Identify breach - breach of implied term
Which UCTA section applies - s6 (Sga)or s7 UCTA (Sgsa)
Effect - valid if reasonable
UCTA 1977 - process to determine validity - breach of express term
Identify breach - express term
Section applies - s3 UCTA providing dealing on others standard written tob
Effect - valid f reasonable
UCTA reasonable test
S11(1) - must be fair and reasonable having regard to the circumstances known or ought to be known at time contract made
S11(5) burden of prof on party looking to rely on clause
Sch 2 - guidelines for courts
Strength of bargaining position
Did customer receive inducement to agree
Existing dealings
Adaptation
UCTA 1977 case law - must whole clause be reasonable
Stewart Gill ltd v Horatio Myer & co ltd 1992 - court felt consider clause as whole, therefore unreasonable.
Watford electronics ltd v Sanderson CFL ltd 2001 - court took few could be split in two parts and test applied separately
