Exclusion Clauses

Question 1

What are 3 ways in which an exclusion clause can be validly incorporated into a contract?

Answer 1

1. Signature
2. Notice
3. Custom/previous course of dealings

Question 2

For an exclusion clause to be valid under common law, what 3 rules must be fulfilled?

Answer 2

1) Clause has been validly incorporated into the contract (via signature, notice, or a course of dealings between the parties) and
2) The wording of the clause covers the loss suffered
3) The clause must not be prohibited under statute

Question 3

What defence can apply if the party can show they have no understanding of what was signed, and there is a fundamental difference between what they thought they signed and what they actually did?

Answer 3

Non est factum

Question 4

What is the contra proferentum rule?

Answer 4

If there is any ambiguity in interpreting a clause, the courts will interpret the ambiguity against the party who drafted the clause

Question 5

An exclusion clause can be incorporated into a contract by ______ if the relying party took _________ ____ to bring it to the other party’s attention ______ or __ the time the contract is being made

Answer 5

notice, reasonable steps, before, at

Question 6

Give two situations in which an exclusion clause may be implied

Answer 6

1. Industry custom
2. Regular and consistent course of dealings between the parties

Question 7

Under the CRA 2015, a consumer can ask the court to set aside any exclusion or limitation that is ….

Answer 7

Unfair

Question 8

When is a term unfair under the CRA 2015?

Answer 8

If it’s contrary to the requirement of good faith and causes a significant imbalance in the rights and obligations of the parties

Question 9

What is an example of an exclusion clause that may be held as a potentially unfair term under CRA 2015?

Answer 9

Exclusion of Trader’s liability for death/PI of Consumer when not caused by negligence

Question 10

The CRA 2015 requirements do not apply to which two types of terms?

Answer 10

1. Terms which relate to the subject matter of the contract or;
2. The price payable (provided they’re transparent and prominent)

Question 11

Which type of clause in B2B transactions will automatically be void under UCTA 1977?

Answer 11

Clauses which exclude/restrict liability for personal injury or death due to negligence

Question 12

Which type of clauses in B2B contracts will be void unless reasonable under UCTA 1977?

Answer 12

Any clause which excludes liability for any other loss caused by negligence

Question 13

Which implied condition under SGA and SGSA cannot be excluded or limited under UCTA 1977?

Answer 13

Title

Question 14

Which breach of obligations cannot be excluded or limited under SGA or SGSA unless reasonable under UCTA 1977?

Answer 14

Compliance with description, satisfactory quality, fitness for a particular purpose

Question 15

What is the reasonableness test under UCTA 1977?

Answer 15

Whether the term in question is a fair and reasonable one to be included having regard to the circumstances which were, or ought to have reasonably been known or in the contemplation of the parties when the contract was made

Question 16

Name any 5 factors the courts consider in order to determine whether a clause is “fair and reasonable” under UCTA 1977

Answer 16

1. Strength of the parties bargaining positions
2. Inducement
3. Customer knowing or reasonably ought to have known about the existence and extent of the term
4. Practicality of complying with a term which restricts/excludes liability if a condition is not complied with
5. Customer’s special order

Question 17

If a party contracts on its standard T&Cs, it cannot rely on which 3 types of terms?

Answer 17

Unless reasonable it cannot :

1. Exclude/restrict liability for its breach of contract
2. Reserve the right to render contractual performance substantially different to what was expected
3. Render no contractual performance at all