Disclaimers and Exemptions Flashcards
What is a Disclaimer?
A Notice intended to limit or exclude a Party’s Liability for an issue.
This only applies to Business Liability.
What is a Notice?
An announcement, whether or not in writing or any other form of communication.
What are the Two Types of Disclaimers?
- Contractual Disclaimer.
- Extra-Contractual Disclaimer.
What is a Non-Reliance Clause?
A Clause stating that the Counterparty, by accepting to Contract:
- Made its own investigations as to the Contract’s factual and substantive matters; and
- That it neither received any Representations from nor relied upon the Party in reaching its decision.
Between the Party and the Counterparty, who bears the Burden of Proving whether a Disclaimer applies?
Whomever is relying on the Disclaimer.
How are Disclaimers Construed?
Strictly, and where there is ambiguity, against the Reliant Party.
Can a Disclaimer limit or exclude Liability for Negligence?
Yes, unless it concerns Death or Personal Injury, and only if:
- The wording is sufficiently clear; and
- Such a Clause will be construed with abnormal strictness.
This does not apply to Consumer Contracts.
What is the Scope of the Unfair Contract Terms Act 1977?
B2B Contracts where both Parties are acting in the course of business.
Under the Unfair Contract Terms Act 1977, what are the Restrictions on Disclaimers?
It cannot:
- Penalise Parties for Enforcement.
- Make Enforcement subject to restrictive or onerous conditions.
- Exclude or restrict any Right or Remedy in respect of the Liability.
- Exclude or restrict the rules of evidence or procedure.
- Exclude or restrict relevant contractual duties or obligations.
Does Mere Awareness of an Exemption Clause constitute a Voluntary Assumption of Risk?
No. The Counterparty must have:
- Fully understood the Clause, including its nature and effect; and
- Had an opportunity to negotiate its language.
When will a Disclaimer be rendered Unenforceable for Unfairness?
When it fails the Reasonableness Test.
What is the Reasonableness Test for Contractual Disclaimers?
Whether the Clause is fair and reasonable in all the circumstances of the Case.
Who bears the Burden of Proving a Disclaimer satisfies the Reasonableness Test?
Whomever is relying on the Disclaimer.
What are the Relevant Considerations for determining whether a term is Reasonable?
- Bargaining power.
- Notice of the Clause.
- Clarity of the Clause.
- Availability of alternative Clauses.
- Availability of insurance for the Liability sought to be limited.
- Availability of information regarding the Contract’s subject matter.
- Any other relevant circumstances, such as inclusion in the Master Agreement.
Can a Party use a Disclaimer to limit the Sum for which it can be Sued?
Yes, but only if:
- The limitation is reasonable given the Reliant Party’s resources; and
- It could not have insured itself at a reasonable cost.
Generally, how do the Courts view Disclaimers between Commercial Parties?
As a mutually-understood risk allocation tool. As such, they are reluctant to interfere.
Under the Consumer Rights Act 2015, what are Traders unable to Disclaim or Exempt?
- The Duties under §9-§11.
- The Duties under §34-§36.
- The Duty under §49 and the Limiation of Liability to a sum below the Price.
- Liability for Death or Personal Injury.
Under the Consumer Rights Act 2015, when will a Term in a Consumer Contract be Non-Binding?
When it is objectively unfair, judged at Formation. In other words, the Term:
- Is Contrary to the requirement of Good Faith; and
- Causes a significant imbalance in the Parties’ rights and obligations to the Consumer’s detriment.
This does not apply to:
- The Contract’s Main Subject Matter; or
- The Price, provided it is prominent and transparent.
