Exclusion Clauses

Question 1

Exclusion Clauses

Answer 1

A term of a contract that seeks to exclude or limit the liability of a party to that contract.

Question 2

Types of exclusion clauses

Answer 2

Exemption clauses and Exception clauses

Question 3

Consumer Guarantees Act 1993

Answer 3

• Applies to contracts for sale of goods and services.
• Only applies where buyer is buying for personal domestic use, not business use.
• Provides implied guarantees and warranties with respect to goods or services.
• Attempting to contract out is an offence.

Question 4

Common Law elements

Answer 4

The exclusion clause is part of the agreement; and
The exclusion is wide enough to cover the breach.

Question 5

Actual notice

Answer 5

Occurs when a person is directly informed about a fact, condition, or legal matter. It means that they have actual, real knowledge of it.

Question 6

Constructive notice

Answer 6

The party seeking to include the exclusion does everything reasonable to bring it to the attention of the other party; or
Document obviously of contractual nature.

Question 7

Strict Construction

Answer 7

Interpretation of contract terms in their narrowest, most literal sense. When applying strict construction, the exact words of the contract are given their plain meaning, and no broader interpretations are allowed.

Question 8

Contra Proferentum

Answer 8

Any ambiguity in a contract is interpreted against the party that drafted it. This is often applied in situations where one party has more control over the wording of the contract

Question 9

Excluding liability for misrepresentations

Answer 9

“The purchaser acknowledges that she is purchasing in reliance on her own judgement and not in any reliance on any statements made by or on behalf of the vendor.”

Question 10

Fair and reasonable considerations

Answer 10

1. All the circumstances of the contract
2. Subject matter of transactions
3. value
4. Bargaining power of each party
5. If the parties had legal advice