Contents of a Contract Flashcards
If there is a sale by description under s13(1) SGA 1979/s3 SGSA 1982, must the buyer have relied on the description? Case.
Yes - Harlington & Leinster Enterprises v Christopher Hull Fine Art.
Can a buyer rely on a description even if he has inspected the goods? Case.
Yes - Beale v Taylor.
What 2 criteria must be met for an exemption clause to be valid?
- It must be incorporated into the contract.
2. It must, as a matter of construction, clearly cover the breach.
In what 3 ways can an exemption clause be incorporated into a contract.
- By signature.
- By notice.
- By course of dealings.
What is incorporation by signature? What 2 criteria must be met? Cases.
The clause is included in the signed contractual document. It must:
- Be legible - L’Estrange v Graucob.
- Not be misrepresented - Curtis v Chemical Cleaning.
What is incorporation by notice? What 2 criteria must be met? Cases.
The notice is brought to the buyer’s attention elsewhere than in the contract.
- It must be in a document which is contractual in nature - Chapelton v Barry.
- The defendant must have taken reasonable steps to bring the notice to the claimant’s attention (N.B. claimant does not necessarily have to have seen it) - Parker v South Eastern Railway.
When assessing what constitutes ‘reasonable steps’, what will be considered? What if the clause is particularly onerous? Case.
The court will consider the position and prominence of the clause, how onerous it is, etc.
If the clause is particularly onerous, attention must be explicitly drawn to it - Thornton v Shoe Lane Parking/Interfoto v Stiletto.
When must steps be taken to draw attention to the notice? Case.
Before the time of contracting - Olley v Marlborough.
How consistent must dealings be in order for an exemption clause to be incorporated by consistent course of dealings? 2 cases.
3-4 dealings per month for 3 years is sufficient - Kendall v Lillico.
3-4 dealings over 5 years not sufficient - Hollier v Rambler Motors.
If the wording of a breach is ambiguous, the courts will apply the ‘contra preferentem’ rule - what is this? Case.
It will be interepreted against the party relying on it - Houghton v Trafalgar Insurance.
Can an exemption clause exempt liability for very serious breaches? Case.
Yes, if it is clearly worded - Photo Products v Securicor.
In order to exclude liability for negligence, an exemption clause must do so expressly, or how else? Case.
The wording must be wide enough to include negligence, e.g. “damage howsoever caused” - Canada Steamship Lines v The King.
The case of Eric Smith v Bush gives further guidelines for the ‘reasonableness’ test in UCTA 1977. What are they?
- How difficult is the job in question?
2. Who has more resources to bear liability?
To what type of contracts do the Unfair Terms in Consumer Contracts Regs 1999 (UTCCR) apply? Under s8(1) what terms will not bind? Under 5(1) how is ‘unfair’ defined?
Consumer contracts.
Unfair terms will not bind.
‘Unfair’ means in bad faith, or where there is a detriment to the consumer
If an exemption clause is valid, what is the consequence? If a limitation clause is valid, what is the consequence?
Exemption - claimant cannot recover. Limitation - claimant can only recover up to the limited amount.
