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
CRA 2015 - what can’t be excluded
The statutory implied terms as to goods
Satisfactory quality cra 2015, s9
Fitness for purpose - cra 2015 s 10
Description - s11
Service contract - breach of statutory implied terms Reasonable care and skill - cra 2015 s50 Info about trader / service - s50 Reasonable price - s51 Reasonable time - s52
Misrepresentation - basics
What is not or is
Mere puff - gimmick sales. Joke
Express term - part of contract - expert opinion - birch v paramount estate 1956 - show house as good as new house
Representation - clear info may entice to agree
Only representation can lead to misrepresentation
Misrepresentation - case law
Oscar chess ltd v Williams 1957 - car dealer made mistake on age, therefore, representation not misrepresentation
Dick Bentley productions ltd v Harold smith (motors) ltd 1965 - dealer knew mileage. Incorrect
Ecay v Godfrey - seller advised. Buyer to have Independant survey, therefore, representation
Definition of misrepresentation
False statement of fact or law intended to and does induce the other party to enter contract
4 Requirements for misrepresentation
False statement - spice girls v Aprilia world service 2000. Knew members leaving ex. To silence trust, insurance, half truth
From one party to another - from one contracting party to another
Fact or law - statement of fact not opinion - bisset v. Wilkinson 1927
Inducement- party must be induced to enter contract edgington v. Fitzmaurice 1885 - lied about loan
All must be in place
Categorising misrepresentation
Fraudulent misrepresentation - false statement, Derry v peek 1889
Negligent misrepresentation - s2(1) misrepresentation act 1967 - no reasonable grounds for believing statement true
Innocent misrepresentation - s2(2) misrepresentation act 1967 - where reasonable grounds for believing it is true
Misrepresentation remedies
Rescission available to all - notice req. car and universal finance co ltd v. Caldwell 1964
Fraudulent - damages as if contract not made
Negligent - damages not based on contractual principles so greater
Innocent - damages if equitable - Howard marine and dredging v Ogden 1978
Contracts (rights of third parties) act 1999
Re exclusion
Enables one to rely on clause (exclusion) if it expressly allows or confers benefit - but subject to usual reasonableness test - standard or the reasonable average person in his/her situation
Misrepresentation question approach
Identify pre contract statements - distinguish terms from representations
If a term consider breach
If representation apply definition of misrepresentation -‘what type is it
Consider rescission and whether any bars apply
Consider 1967 act
