Exclusion clauses Flashcards
What is the default rule for exclusion clauses?
They are assumed to be part of the contract, unless
(1) A common law limitation applies
(2) A statutory limitation applies
Case that shows that if an exclusion clause is written into a contract, it is assumed to be valid, even if the person has not read it
L’Estrange v Graucob (1934)
Mrs L’Estrange bought a cigarette vending machine for her cafe. There was a clause excluding all liabilities, which she didn’t read. Nonetheless, it still applied
Case showing that if there has been an oral misrepresentation, this can defeat an exclusion clause which is in the written contract
Curtis v Chemical Cleaning and Dyeing Co (1951)
Mrs Curtis takes her wedding dress to be cleaned; written contract says the cleaners are expemted from all damage; she’s told orally that this only refers to beads of sequins; when damage to the main dress occurs, the exclusion clause is interpreted so as to be in line with the oral representation
When can an exclusion clause on a notice/sign/ticket be valid?
When:
(1) Reasonable steps are taken to draw the customer’s attention to the clause
(2) These steps are taken before or at the time of the contract’s formation, not after
Case showing an exclusion clause must be made clear before or at the time the contract is made, not afterwards
Olley v Marlborough Court Hotel (1949)
Sign was up in a hotel room excluding hotel from liability; but as they had made their booking downstairs before entering the room, this couldn’t be part of the contract
Case showing that an exclusion clause can’t just be on a receipt - it needs to be on a contractual document
Chapelton v Barry Council (1940)
Deckchairs case - exclusion of liability is noted on the receipt, but that’s not valid
Case showing that an exclusion clause on a parking ticket is not valid by itself, because the ticket is a receipt, not part of the contract
Thornton v Shoe Lane Parking (1971)
Case showing that an exclusion clause on the back of a ticket, with the front simply stating “see back”, was not valid
Parker v SE Railways (1878)
Lost luggage case
Case showing that an exclusion clause could be implied by prior dealings, but only when there is a consistent, durable relationship and exclusion clauses have always been used
Hollier v Rambler Motors (1972)
A guy goes to a garage 3-4 times and there is always a written contract with an exclusion clause. The next time, they tow his car in and there is no written exclusion. Garage argues that one should be implied in by prior dealings. Held that this would in theory be possible, but here the relationship is not consistent enough
When could a third party benefit from an exclusion clause?
If the Contracts (Rights of Third Parties) Act 1999 applies
What general approach have courts taken in interpreting exclusion clauses?
They have interpreted them narrowly - when there is ambiguity, they will decide against the clause applying
Case showing that courts will interpret exclusion clauses narrowly, finding that they don’t apply if there is any ambiguity
Oliver Nobahar-Cookson v The Hut Group (2016)
For statutory limitation of exclusion clauses, what two statutes are relevant?
Unfair Contract Terms Act 1977 (business-business contracts)
Consumer Rights Act 2015 (business-customer contracts)
What cannot be excluded from a contract, under UCTA 1977?
s2(1): Liability for death or personal injury
s6(1): The implied term that the party has title to what they are selling
What is the test for whether an exclusion clause is valid under UCTA 1977?
Whether it is “reasonable”
Case involving photos showing an exclusion clause that was held to be unreasonable under UCTA 1977
Warren v Truprint Ltd (1986)
A printing company put a clause in saying they would be liable only for a replacement film if photos were lost. When they damaged a couple’s silver wedding photos, this was held not to be reasonable
What test for exclusion clauses does the CRA 2015 set out?
A “fairness” test
Which implied terms in a contract for goods can a business not exclude, under CRA 2015?
(1) Goods are of satisfactory quality
(2) Goods are fit for purpose
(3) Goods match description
(4) Goods match a model/sample
(5) Installation will be done properly (when relevant)
Which implied terms in a contract for services can a business not exclude, under CRA 2015?
(1) Reasonable care and skill
(2) Reasonable price
(3) Reasonable time
(4) All that they’ve said about the service is binding
How does the CRA 2015 define an “unfair” term?
A term which causes a signficant imbalance in the rights and obligations of the consumer and the business, to the disadvantage of the consumer
What terms are not subject to the fairness test in CRA 2015?
Terms about:
(1) the price or
(2) the subject matter of the contract,
As long as they are transparent and prominent
