Exclusion and limitation clauses Flashcards
What are exclusion clauses
Terms in a contract which excludes liability of a party for breach of contract.
What are limitation clauses
Terms that limit the liability if a contract is breached
What are the 3 common law controls that are exclusion clauses
Signature, reasonable notice and previous cause of dealing
What is meant by signature as an exclusion clause
If a document is signed at the time of making the contract, its contents become terms of that contract, regardless of whether they have been read and understood
What case would you use for signature
L’Estrange v Graucob
However what other type of clarification of a term may not exclude liability in signature
Verbal or alternative written clarification
What case do you use for verbal or alternate written clarification of a term
may not exclude liability under signature
Curtis v Chemical Cleaning and Dyeing
What is meant by reasonable notice under exclusion clauses
If separate written terms are presented, those terms only become part of the contract if it can be said that the recipient had reasonable notice of them
What case do you use for reasonable notice under exclusion
Olley v Marlborough Court Hotel
What is meant by previous course of dealings under exclusion clauses
If two parties have previously made a series of contracts between them, and those contracts contained an exemption clause, that clause may also apply to a
subsequent transaction, even if the usual steps to incorporate the clause had not
been taken
What case do you use for previous course of dealings
Hollier v Rambler Motors
What is the contra proferentem rule
If the meaning of a term is unclear, the words will be understood against the person who put them in the contract
Who is the contra proferentem rule least favourable to
The one who introduced it and tries to rely on it
What case do you use for contra proferentem rule
McCutcheon v David MacBrayne Ltd
What are the 2 statutory controls that help an imbalance between the parties to contract
Consumer rights act and unfair terms act
What are the 3 restrictions on exclusions in contracts between traders and consumers in the CRA
1.A ‘fairness test’ for enforceability of terms and consumer notices
2.A ‘grey list’ of potentially unfair clauses in consumer contracts
3.The test of fairness doesn’t apply to the main subject matter of the contract or terms that set the price if they are ‘transparent and prominent’
What does s31 state about excluding or limiting liability in the CRA
Prohibits a term excluding or limiting the liability for s9, 10, 11, 14 and 15
(satisfactory, fir for purpose, as described, match a model and conformity of the goods)
What does s57 state about excluding or limiting liability in the CRA
Prohibits a term excluding or limiting liability, for the supply of services for s49, 50, 51 and 52
(reasonable skill and care, binding info, price and time)
What does s65 state about excluding or limiting liability in the CRA
Prohibits exclusion or restriction of liability for death or personal injury resulting from negligence
What does s62 state about excluding or limiting liability in the CRA
A terms is unfair when it puts the consumer at a disadvantage, by
limiting the consumer’s rights or disproportionality increasing their obligations as compared to the trader’s rights and obligations
What does the court take into account with s62
The specific circumstances existing when the term was agreed, other terms in the contract and the nature of the subject matter
What does s69 state about excluding or limiting liability in the CRA
If a term or consumer notice could have different meanings, the meaning that is most favourable to the consumer shall prevail.
What is the grey list
This is a non-exhaustive list that may be considered unfair
What are some examples of what may be considered unfair on the grey list
*Allow disproportionate changes
*Require the consumer to pay for services which have not been
supplied when the consumer ends the contract
*Allow the trader to change the price after the consumer is bound
What does the unfair contract terms act provide protection against
Clauses in non-customer contracts
What does s2(1) state about the UCTA
Cannot exclude liability for death and personal injury caused by negligence
What does s6(1) state about the UCTA
The implied condition as to title (transferring a person’s rights) cannot be excluded
What does s3 impose in the UCTA
Reasonableness tests to contracts
What case would you use for s3 of UCTA and reasonableness tests
Smith v Eric Bush
What does s11 of UCTA state about test of reasonableness
The court should ask itself whether the term in question is a fair and reasonable one to be included having regard to the
circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made
What does schedule 2 provide
The factors for the court to consider in applying the reasonableness test
What are the 5 factors the courts will consider from schedule 2 for the reasonableness test
a)The strength of the bargaining positions of the parties
b)Whether the customer received an inducement to accept the term
c) Whether the customer knew or ought to have known of the term
d) Where the term excludes or restricts any relevant liability if some condition is not complied with
e) Whether the goods were made or adapted to the special order of the customer
What are the 2 criteria set out in s11(4) for limitation clauses in UCTA
1.The resources that the defendant could expect to be available for meeting their liability
2.How far it was open to the defendant to cover themselves by insurance against any successful claim
What cause would you use for the criteria of limitation clauses in s11(4)
George Mitchell Ltd v Finney Lock Seeds Ltd
