Exclusion Clauses Flashcards
What is an exclusion clause
It’s when one party to the contract attempts to exclude all liability or limit liability for breaches of a contract
To regulate exclusion clauses there are:
Common law controls
Statutory controls
Common law controls
Whether it has been incorporated
This can be done through signature, reasonable notice and previous dealings
Common law (signature)
L’Estrange v Graucob – where a party has signed a written agreement they are bound by it (even if they haven’t read it).
Common law controls (Is any notice with the term in it incorporated by reasonable notice?)
Notice has to be at the time the contract was made. Introducing terms later will fail. See Olley v Marlborough Court Hotel.
There must be a contractual document, distinct from a receipt (Barry)
There must be reasonable steps to draw the exclusion clause to the other party’s attention, (Parker)
The reasonable notice must be given before conclusion of the contract (Olley, Thornton)
Common law controls (previous dealings)
Needs to be a consistent course of dealings – Hollier v Rambler Motors.
Statutory control of exclusion clauses
UCTA 1977
Consumer Rights Act 2015
UCTA 1977 B2B s.2(1)
Cannot exclude or restrict liability for death or personal injury resulting from negilagence
UCTA 1977 B2B s.6
Cannot exclude clauses that are implied by statute
UCTA 1977 B2B s.11
Terms are subject to a reasonable test
UCTA 1977 B2B schedule 2
Lists the factors to take into account when applying reasonableness test
CRA 2015 B2C s.31
S.31 says you can’t exclude or limit liability for the following s.9, 10, 11 14, 15 (sale of goods)
CRA 2015 s.57
s.57 prohibits excluding or limiting liability relating to sale of services s.49; s.50; s.51; s.52
CRA 2015 s.62
Requires all consumer contract terms and notices to be fair
CRA 2015 s.65
Prohibits exclusion or restriction for liability for death or serious injury due to negligence
3 tests of reasonableness (1)
Knowledge test – s.11(1) UCTA 1977 – is the insertion of the clause reasonable in light of what was known by the parties at the time of the contract – Smith v Eric Bush.
3 test of reasonableness(2)
Test in relation to exclusions of the Sale of Goods Act 1979 and Supply of Goods and Services Act 1982 – Schedule 2 UCTA 1977
Strength of bargaining position of the parties
Whether the customer received an inducement to agree to the term
Whether the customer knew of the existence and extent of the term
Where the term excludes or limits liability if some condition is not complied with, whether it was reasonable at the time of the contract to expect that compliance with that condition would be practicable.
Whether the goods were manufactured, processed or adapted to the special order of the customer.
See Watford Electronics v Sanderson
3 test of reasonableness (3)
Section 11(4) specifically relates to limitation clauses. There are two criteria:
The resources which the defendant could expect to be available for meeting his or her liability should it arise.
How far it was open to the defendant to cover him or herself by insurance against any successful claim.
See George Mitchell v Finney Lock Se
