exclusion clauses Flashcards
what is an exclusion clause?
any clause that attempts to exclude any liability entirely
what is a limitation clause?
a clause that attempts to restrict/limit a parties liability
what are the 3 ways the court can try to control the power of exclusion clauses?
- saying it was not incorporated into the contract
- the contra proferentum rule
- saying the clause is not effective under statute
what does Thornton v Shoe Lane Parking say?
that the general rule for exclusion is that the more onerous the exclusion, the clearer it must be
what does L’Estrange v Graucob say?
that if a contract is signed then it is incorporated even if not read or understood
what is the exception for the rule from L’Estrange? what is the case?
- Interfoto v Stiletto
- clauses with onerous terms may not be incorporated if specific attention is not drawn to it
what does Curtis v Chemical cleaning and dyeing say?
exclusion clauses must not be contradicted via oral statements
what does Chapelton v BUDC say?
that if there is nothing pointing to the fact there is an exclusion before contract is made it will not be incorporated
what does Parker v SE Railway say?
if there is a clear indication of the exclusion before the contract is signed then it will be implied
what does O’Brien v MGN say?
that if D took reasonable steps to warn C about the exclusion, it will be incorporated
what does Hollier v Rambler Motors say?
if the dealings were not regular enough then this will not be a valid exclusion
what does Spurling v Bradshaw say?
that if the parties had frequent enough dealings to create a ‘regular course of dealings’ then c should’ve known about the exclusion
what is Contra Proferentum?
where courts will interpret the clause against the party relying on it
why did the excusion work in Transocean Drilling UK v Providence Resources?
-clause was clear in how it works and was repeated multiple times
-both parties agreed to the term
-both parties were businesses so had the power to negotiate with each other
who does the CRA apply to?
B2C
who does the UCA apply to?
B2B, C2C
what is the unfairness test and where does it come from?
-s62 of CRA
-a term is unfair if it is causing a significant imbalance in the parties rights and obligations
-aka, when the term puts a consumer at a disadvantage by limiting their rights or increasing their obligations significantly
what are the 3 exceptions to the unfairness test?
-exclusion clauses about implied rights to goods are automatically unfair (s31), as well as exclusion clauses about implied rights to services (s57)
what is the Unfair Contract Terms Act 1977 (UCTA)?
a statute that is much narrower than CRA, as it only applies to exclusion clauses
what does s2(1) of UCTA say?
manufacturers, owners of premises or suppliers of services cannot exclude liability for death or personal injury caused by negligence
what does s2(2) of UCTA say?
suppliers of services, manufacturers or owners of premises can exclude liability for causing property damage caused by negligence so as it is reasonable
what does s3 of UCTA say?
parties can exclude liability for breach of contract if the clause is reasonable
what does UCTA look at to see whether a clause is reasonable?
-s11(1) exclusion clauses in general
-s11(2) exclusion clauses about implied terms
what does s11(1) UCTA say?
the term must have been reasonable based on what was known to the parties at the time of the contract - this is the knowledge test
what does s11(2) UCTA say?
-meant to be used in implied terms for goods and services, but in reality applies to all B2B exclusions
-look at guidelines in schedule 2
what are the 5 things set out in schedule 2?
-the relative strength of bargaining power
-whether the consumer received any inducement to agree to the term
-whether the buyer should have known about the term
-whether the goods were made to the special order of a customer
-whether liability is accepted only if certain conditions are complied with
