Contract Construction

Question 1

3 types of Contractual terms

Answer 1

1. Express Terms
2. Terms implied by behaviour and statute
3. Terms incorporated by reference

Question 2

4 Strict Rules of Interpretation

Answer 2

1. Intervention
2. Extrinsic Evidence
3. Ejusdem generis rule
4. Contra proferentum rule

Question 3

The Moorcock (1889)

Intervention

Answer 3

CASE: The ship needs to unload and reload cargo and the contract states that this should be done at a specific time. The only safe time to do this is high tide (so ship does not run aground) but the time agreed corresponds with low tide. Safety of ship is not addressed specifically in contract. Vessel is damaged

HELD: The court intervenes and rules that custom implies that no reasonable person would have exposed the ship to damage. Although the defenders had not been asked to assure safety of ship, they should have provided such an undertaking. Many disagree with this intervention and argue that a court should not imply a contract term just because it is reasonable to do so.

Question 4

Exclusion Clauses

Answer 4

Exclusion clauses are written in contracts to try and limit/exclude a party’s liability. This clarifies what a party is/isn’t liable for.

Question 5

Taylor v Glasgow Corporation (1951)

Exclusion Clauses

Answer 5

CASE: Mrs Taylor went to bath in a Glasgow corporation facility and received a ticket as proof of payment. In the facility, she slipped and injured herself. When she tried to claim damages, Mrs Taylor was referred to an exclusion clause printed on the back of the ticket however she argued that she didn’t consider reading the ticket as she thought it was just a voucher to enter the baths.

HELD: The court held it was reasonable that Mrs Taylor only considered the ticket as a voucher and the case established two points.

Question 6

Taylor v Glasgow Corporation (1951)

Establishes two points relating to exclusion clauses

Answer 6

1) Where an exclusion clause is printed on a ticket it should be of a type that a reasonable person might expect to form part of the contract’s documentation.
2) Reasonable steps must have been taken to bring the conditions to the notice of the contracting party.

Question 7

The Unfair Contract Terms Act 1977

Answer 7

This Act only applies to businesses. Includes companies, partnerships, sole traders, local authorities, and government departments.

Includes the use of notices (Exclusion clauses) which attempt to exclude liability where there is no contract between the person relying on the notice and the injured party. However, there are exceptions.

Any clause where a party attempts to limit responsibility for death/injury can be made void. A term will only be upheld if it is fair and reasonable to be incorporated into a contract whether this is an express or reference term.

Businesses can’t limit their liability for personal injury or death due to faulty goods. The consumer will be protected under the act.

•S 16 Liability for personal injury or death