Contract Terms (Exclusion Clauses)

Question 1

what is exclusion clauses?

Answer 1

terms in a contract that limit or exclude liability for a breach of contract

Question 2

businesses limit their liability by:

Answer 2

restricting the value of a claim
excluding claims for defects after 14 days

Question 3

common law controls

Answer 3

is the agreement signed?
is the clause incorporated?
is the term incorporated through custom or previous dealings?

Question 4

is the agreement signed? (common law control)

Answer 4

if the contract is signed, the exclusion cause applies. But if the clause has been misrepresented, the courts will interpret that clause in line with the misrepresentation (Le’Estrange v Graucob, Curtis v Chemical Cleaning and Dyeing Co)

Question 5

Le’Estrange v Graucob

Answer 5

facts: Mrs. Graucob bought a vending machine with an exclusion clause.
held: Despite not reading it, the court ruled she was bound by the clause since she signed the contract.
principle: a party who signs a contract is bound by its terms, including exclusion clauses, even if they didnt read/understand them.

Question 6

Curtis v Chemical Cleaning and Dyeing Co

Answer 6

facts: Mrs. Curtis’s coat got damaged during cleaning. She sued for damages, saying an exclusion clause wasn’t valid.
held: court agreed, the clause wasn’t part of the contract properly.
principle: Exclusion clauses must be clearly communicated to be valid in a contract.

Question 7

is the clause incorporated? (common law control)

Answer 7

the clause must be brought to attention before the contract is signed or it will not apply (Olley v Marlborough Court Hotel)

Question 8

Olley v Marlborough Court Hotel

Answer 8

facts: Mrs. Olley’s fur coat was stolen from her hotel room. She sued for damages, disputing the validity of an exclusion clause.
held: court ruled the clause wasn’t valid as it wasn’t effectively included in the contract.
principle: Exclusion clauses must be clearly communicated during contracting to be valid.

Question 9

is the term incorporated through custom or previous dealings?

Answer 9

previous dealings can mean an exclusion clause is incorporated, but this must be consistent (Hollier v Rambler Motors, McCutcheon v Davis MacBrayne Ltd)

Question 10

Hollier v Rambler Motors

Answer 10

facts: Mr. Hollier bought a car with an exclusion clause limiting liability. When the car broke down, he sued for damages.
held: court ruled the clause wasn’t valid because it wasn’t effectively included in the contract.
principle: Exclusion clauses must be clearly communicated during contracting to be valid and enforceable.

Question 11

Davis MacBrayne Ltd

Answer 11

facts: delays in completing house construction arose due to unforeseen issues.
held: court found the delays were caused by the council’s actions, entitling Davis Contractors to an extension of time.
principle: Delays caused by one party’s actions may entitle the other party to an extension of time under the contract.