Contract Terms and Exemptions Flashcards
Hutton v Warren [1836]
Terms will be implied by courts into a contract based on local custom or trade usage
Spurling v Bradshaw [1956]
Terms will be implied by courts based on previous course of dealings between parties, exemption clauses may be validly incorporated by course of dealings
Shirlow v Southern Foundris Ltd
A term can only be implied if point so obvious that it went without saying that that was what the parties intended. If a bystander suggested a term to include and both parties responded of course then the test was satisfied
AG of Belize v Belize Telecom Ltd [2009]
The business efficacy and officious bystander tests still hold, but the court’s duty is simply to establish what the contract would mean to a reasonable person having the relevant background information
Liverpool CC v Irwin [1977]
Where the contract is of a kind which frequently occurs, the courts may identify provisions which are typical of that kind of contract and say that these provisions will be implied terms unless the parties make contrarty provisions
L’Estrange v Graucob [1934]
If the clause is in a contractual document and it is legible, it will be incorporated as long as the document was signed by the innocent party
Curtis v Chemical Cleaning & Dyeing Co [1951]
An exemption clause will be invalid if the effect of the clause has been described inaccurately and the innocent party has reasonably relied on the inaccurate description in entering the contract
Beale v Taylor
s.13 SGA - may still apply where the goods have been inspected
Chapelton v Barry UDC [1940]
The document containing the clause must be contractual in nature
Parker v South Eastern Railway [1877]
Unnecessary for the innocent party to be aware of the clause if reasonable steps have been taken by the other party to inform them. Factors in consideration are: clause position in the document, prominence of the clause and the type and nature of the clause
Thornton v Shoe-Lane Parking ltd [1971]
Onerous clauses must be explicitly drawn to the attention of the other party
Interfoto v Stiletto [1989]
Onerous clause printed on the foot of the delivery note does not amount to reasonable steps to bring it to their attention
Kendall v Lillico [1969]
3-4 times per month over 3 years amounted to course of dealings
Hollier v Rambler Motors [1972]
3-4 times in 5 years did not amount to course of dealings
Olley v Marlborough Court Ltd
Reasonable steps must be taken before the contract is finalised for the exemption clause to be incorporated
McCutcheon v MacBrayne Ltd [1964]
The exemption clause has to be consistently included to be relied upon
Houghton v Trafalgar Insurance [1954]
Contra Proferentem Rule - Clause is ambiguous or unclear the courts will interpret againt the party relying on it
Canada Steamship Lines v R [1952]
Exemption clause for negligence must be clearly worded - it must clearly relate to negligence, expressly exempting or contain words that are wide enough to exclude liablitiy for negligence, provided the wording only covers negligence
Photo Productions Ltd v Securicor Transport Ltd [1980]
An exemption clause can cover very serious breaches as long as it is clearly worded
Smith v Eric Bush [1990]
Whether an exemption clause is reasonable will depend on whether the parties are of equal bargaining power, reasonable for the advice to be obtained elsewhere, task difficulty and the practical consequences in terms of insurance
St Albans City and District Council v International Computers [1995]
Reasonableness of limitation clauses:
Experienced commercial bodies free to make their own bargain
Awareness of the limitation clause at the time if the contract
Defendant have ample resources
Amount of limitation clause reasonable
Schenkers v Overland Shoes
Standard industry terms are generally reasonable
Watford Electronics v Sanderson [2001]
Exemption clause can be split into its various parts if it serves a distinct purpose, reasonableness of each part is assessed separately
Stewart Gill v Horatio Myer [1992]
Clause as a whole should be considered and not only the part relied on, reasonableness assessed on when the contract was made not the time of the breach
