Chapt 5: Exemption Clause Flashcards
What is an exemption clause?
It is an express term that exclude/limit liability of the party relying it.
Who is the excludee and excluder?
Excluder: The one relying on the EC.
Excludee: The one being use against by EC.
What the 4 factors that needs to be satisfy for EC to be Valid?
- Incorporation of EC.
- Construction of EC.
- Unusual Factors.
- Does UCTA intervene EC?
What the 4 factors that needs to be satisfy for EC to be Valid?
- Incorporation of EC.
- Construction of EC.
- Unusual Factors.
- Does UCTA intervene EC?
3 way of incorporating EC
- By signature
- By reasonably sufficient notice
- By previous course of dealing
Explain Incorporation of EC by signature:
Based on L’estrange V Graucob, it states that one is bound by all the terms in the contract once signed.
Even if they do not read it.
Explain Incorporation of EC by reasonably sufficient notice.
When it comes to oral contracts or unsigned docs,
The notice must satisfy 2 conditions:
- Contemporaneity
- Sufficient
3 ways of how:
- When notice was given?
- Where was the notice located?
- Was adequate notice given?
3 ways of how EC is incorporated by reasonable Sufficient notice:
- When notice was given?
- Where was the notice located?
- Was adequate notice given?
- When notice was given?
(It must be given before or at the time the contract is formed = EC valid) - Where notice was located?
(Notice should locate at somewhere a reasonable man would find = EC valid)
Under sufficient:
3. Was adequate notice given?
(The notice need to be clearly visible, have made effort to bring attention to the notice = EC valid)
If excludee has disability?
Excluder don’t knows, took reasonable effort to bring attention to notice = EC valid
Excluder Knows, took no extra effort = EC invalid
Explain Incorporation of EC by previous course of dealing:
If parties are often in the same dealings with the same EC. It is well-esthablished
(EC valid)
Explain Construction of EC:
It looks at how it is constructed or interpreted.
Firstly, ask yourself whether EC applies to the breach/loss in question?
2 rules of construction:
- Contra Proferentum Rule
- Main Purpose Rule
What about the 2 rules of construction:
Contra Proferentum Rule/Main Purpose Rule
- Contra Proferentum Rule, see if there’s Ambiguity in interpreting the EC. If yes = EC would be construed against excluder. (Shoot yourself in the foot)
- Main Purpose rule, See if EC exclude the main purpose of the contract. If yes, generally EC invalid. Unless, really construed in clear and unambiguous words, to exclude the breach that is root of the contract. EC will be valid.
If EC attempts to exempt/limit liability for negligence?
EC must be construed with clear express of words exempting/limit negligence.
E.g. clearly use words such as “Negligence”.
if the word use can cover other liabilities other than Negligence. Focus on other liabilities.
Explain unusual factors:
If there’s any unusual factors such as fraud or misrepresentation. If yes, it limits the EC effectiveness.
Factors for EC to be valid,
Explain UCTA:
UCTA only applies to EC.
Draw the mindmap out.
3 steps:
State each of the statutes.
What first schedule of UCTA states?
the contract falls within the scope of UCTA. Contracts that does not fall under is “Land”, “Securities”, “Insurance” or “IP”
Section 1(3) of UCTA states:
When it comes to contract or tort section 2 to 7 only applies to “business liabilities” (B2B, B2C)
S(2) of UCTA states:
Looks at EC that exempts negligence liability
S2(1) and S2(2) of UCTA states:
S2(1): Breach of negligence results in death and injury, EC invalid.
S2(2): Breach of negligence results in damage or loss, EC is invalid. Unless EC is proven reasonable based on the reasonable test.
S3 of UCTA relate to:
Contractual Liability
S3(1) of UCTA states that:
The relevant sections only apply to contractual parties where one of them deals as a consumer or deals with other’s written standard terms of business.
S12 of UCTA states:
It defines what’s a consumer transaction.
S3(2) of UCTA states:
Parties cannot be excluded/exempted from breach of their contractual liability, unless proven to be reasonable through reasonable test.
S11 of UCTA sets out what?
It sets out the reasonable test for EC.
S11(1) of UCTA states:
EC would be fair and reasonable if we take into consideration of the circumstances that were/ought reasonably to have been or in contemplation of the parties AT THE POINT WHEN CONTRACT IS MADE.
