Contract Law - Exclusion Clauses

Question 1

Exclusion Clauses

Answer 1

Exclude liability completely

Question 2

Limitation Clause

Answer 2

Limit liability

Question 3

Criteria for exclusion clauses

Answer 3

1. Needs to be incorporated into the contract
2. Needs to cover what has happened - construction
3. Legislation prohibits some exclusion clauses

Question 4

Incorporation

Answer 4

Must be incorporated into the contract when it concluded.

1. By signature
2. By notice - more onerous the term the more that needs to be done to bring notice of it
3. By custom or course of dealing - i.e. parties dealt on same terms in the past

Question 5

Construction

Question 6

Contra proferentem rule

Answer 6

If there is any ambiguity the courts will interpret this against the party intending to rely on the clause

Applies to exclusion clauses

Question 7

Unfair Contract Terms Act 1977 (UCTA)

Answer 7

Exclusion clauses between businesses.

Some exclusions are void and others are valid only if reasonable

Void: exclusion for death and personal injury caused by negligence and exclusion of implied condition of good title to goods. Apply to exclusions of liability and limitations of liability

Question 8

Reasonableness test

Answer 8

Was it reasonable to include the clause at the time contract was made?

Party relying on clause needs to prove it was reasonable

Question 9

Consumer Rights Act (CRA) 2015

Answer 9

Exclusion clauses between a business and consumer

Prohibited terms are unenforceable.

Any attempt to exclude liability for any implied terms in Sale of Goods Act is prohibited

An term excluding liability for death/personal injury caused by negligence is prohibited

**Unfair terms:

Contrary to requirements of good faith, if it causes an imbalance between the parties and to the detriment of the consumer. Not binding on consumer.

Terms must be transparent and legible to be fair

Any ambiguity resolved in consumer’s favour

Not binding on consumer