Contract - terms: exclusion and limitiation clauses by common law Flashcards
What are exclusion clauses?
Terms within a contract which exclude liability for breach of contract
What are limitation clauses?
Terms within a contract which set an upper limit on liability for breach of contract
What is some AO3 for exclusion and limitation clauses?
Clear distinction between ‘limitation’ and ‘exclusion’, clarity in law for understanding
Promotes certainty, upholds ROL
Allows business to manipulate consumers
What are common law controls?
Whether agreement was signed
Whether term was incorporated in contract
Whether term was incorporated as a result of previous dealing between parties
What is whether the agreement was signed?
Signature won’t incorporate terms if it’s not a contractual document
Where a party has signed agreement, they are bound by it
What happened in L’Estrange v Gracoub?
Vending machine didn’t work, when she signed contract, it included exclusion clause so no term could be implied
What is the rule on verbal agreeements?
Verbal agreements overrule written contract
What is some AO3 for whether agreement was signed?
Language used implied terms isn’t accessible for lay people’s understanding, may read it and not understand it
Unfair advantage to trader by allowing them to exclude liability and leaver her with a broken machine
In cases, parties could claim they haven’t read agreement to get remedy
What happened in Curtis v Chemical Cleaning?
Oral assurance made that exclusion to damage to wedding dress only included beads and sequins so when it was stained, able to claim
What is some AO3 for oral assurances?
Doesn’t protect those who don’t read doc before signing, it should because businesses should be responsible to explain anything they won’t be liable for explicitly to a consumer. Majority sign contracts without reading as they’re too long
No, they should’t protect as should be up to person to check what they are signing
Promotes freedom of contract as parties pick and choose which terms
But, difficult to prove what was said
What is whether any notice with term is incorporated into contract?
Incorporating notices or forms into the contract - usually about unwritten contracts
Notice only incorporated if at the time the contract was made, the unsigned notice was brought to attention of person suffering exclusion clause
What happened in Thornton v Shoe Lane Parking?
Terms stated inside car park were not incorporated in original contract
What happened if term is harsh if incorported terms?
Must be brough to attention of other party, otherwise courts won’t incorporate it
When will terms be incorporated into contract after acceptance?
New contract which varies the original contract
If specified in original contract that there can be a variation in terms
What happened in Olley v Marlborough Court Hotel?
Terms not incorpated into contract as couple unaware of clause when they formed contract at check in
What is some AO3 for Olley?
Ensures C’s aren’t bound by terms they’re unaware of
When can tickets be incorporated?
If it is reasonable to expect that the back of the ticket will be checked for terms but if it’s not reasonable for a party to expect terms on the back, won’t be incorporated into contract
What happened in Chappelton v Barry Urban DC?
Council couldn’t rely on this clause as reasonable person would have disregarded ticket as a receipt and wouldn’t have read the back
What happened in Thompson v London Midland and Scottish Railway?
Despite C not being able to read, company took reasonable steps to ensure customers were aware of terms
What is soem AO3 for tickets?
Reasonableness - judicial creativity, inconsistent, ROL, individualised cases - subjective
What is previous dealing between parties?
Terms can be incorporated into a contract if parties have past dealings with each other, providing dealings are consistent
Though the courts are reluctant to incorporate terms into a contract
What happened in McCutcheon v David MacBrayne?
Sometimes asked to sign doc with exclusion clause but not always, this time, C given receipt with exclusion cluase, didn’t read or sign doc, ferry sank and destroyed car.
Term not incorporated into contract, Dealings between parties were not consistent so clause couldn’t be used
What is some AO3 for McCutcheon v David MacBrayne?
Consistent with Hollier v Rambler Motors - demonstrates consistency, upholds ROL, easier to advise clients
Legal principles both both cases are in line with each other, easier to predict outcomes
Hollier is a SC case, more experienced judges agree
What is the effects of exclusion clauses on third parties to contract?
Privity of contract prevents third party relying on terms of a contract
Demonstrated in Scruttons v Midland Silicones where C was unable to sure for his injuries as not party to contract
CRTPA allow third parties to sue
What is some AO3 for effect of exclusion clauses on third parties to contract?
Parliament have legislated to ensure C’s are protected by contracts which they are no party to
Parliament are our law making body - upholds PS
However, D may escape liability if they insert a clause which excludes application of acy
What is the Contra Proferentem Rule?
Only applies when an exclusion clause is unclear
Prevents terms being given a wide meaning.
When words are ambiguous, court decides if D can rely on term
What happened in White v John Warwick?
Contract stated exclusion clause made D not liable for any persoal injury
Ambiguous wording of exclusion clause protected them from claim in contract but able to claim under negligence
What happens when there is doubt about the meaning of a term in contract?
Words must be intrerpreted in line with how person who wrote the contract intended them
What happened in Transocean UK v Providence Resources?
Principle applies when term is ambiguous and one-sided
What is some AO3 for the Contra Proferenetum Rule?
English law should include a duty to act in good faith and fair dealing
Enforced in European contract law and this duty shouldn’t be excluded or limited to ensure all contracts are at least to this standard
However, parties won’t always act in good faith which could limit A2J
