exclusion clauses

Question 1

what is an exclusion clause?

Answer 1

any clause that attempts to exclude any liability entirely

Question 2

what is a limitation clause?

Answer 2

a clause that attempts to restrict/limit a parties liability

Question 3

what are the 3 ways the court can try to control the power of exclusion clauses?

Answer 3

• saying it was not incorporated into the contract
• the contra proferentum rule
• saying the clause is not effective under statute

Question 4

what does Thornton v Shoe Lane Parking say?

Answer 4

that the general rule for exclusion is that the more onerous the exclusion, the clearer it must be

Question 5

what does L’Estrange v Graucob say?

Answer 5

that if a contract is signed then it is incorporated even if not read or understood

Question 6

what is the exception for the rule from L’Estrange? what is the case?

Answer 6

• Interfoto v Stiletto
• clauses with onerous terms may not be incorporated if specific attention is not drawn to it

Question 7

what does Curtis v Chemical cleaning and dyeing say?

Answer 7

exclusion clauses must not be contradicted via oral statements

Question 8

what does Chapelton v BUDC say?

Answer 8

that if there is nothing pointing to the fact there is an exclusion before contract is made it will not be incorporated

Question 9

what does Parker v SE Railway say?

Answer 9

if there is a clear indication of the exclusion before the contract is signed then it will be implied

Question 10

what does O’Brien v MGN say?

Answer 10

that if D took reasonable steps to warn C about the exclusion, it will be incorporated

Question 11

what does Hollier v Rambler Motors say?

Answer 11

if the dealings were not regular enough then this will not be a valid exclusion

Question 12

what does Spurling v Bradshaw say?

Answer 12

that if the parties had frequent enough dealings to create a ‘regular course of dealings’ then c should’ve known about the exclusion

Question 13

what is Contra Proferentum?

Answer 13

where courts will interpret the clause against the party relying on it

Question 14

why did the excusion work in Transocean Drilling UK v Providence Resources?

Answer 14

-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

Question 15

who does the CRA apply to?

Answer 15

B2C

Question 16

who does the UCA apply to?

Answer 16

B2B, C2C

Question 17

what is the unfairness test and where does it come from?

Answer 17

-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

Question 18

what are the 3 exceptions to the unfairness test?

Answer 18

-exclusion clauses about implied rights to goods are automatically unfair (s31), as well as exclusion clauses about implied rights to services (s57)

Question 19

what is the Unfair Contract Terms Act 1977 (UCTA)?

Answer 19

a statute that is much narrower than CRA, as it only applies to exclusion clauses

Question 20

what does s2(1) of UCTA say?

Answer 20

manufacturers, owners of premises or suppliers of services cannot exclude liability for death or personal injury caused by negligence

Question 21

what does s2(2) of UCTA say?

Answer 21

suppliers of services, manufacturers or owners of premises can exclude liability for causing property damage caused by negligence so as it is reasonable

Question 22

what does s3 of UCTA say?

Answer 22

parties can exclude liability for breach of contract if the clause is reasonable

Question 23

what does UCTA look at to see whether a clause is reasonable?

Answer 23

-s11(1) exclusion clauses in general
-s11(2) exclusion clauses about implied terms

Question 24

what does s11(1) UCTA say?

Answer 24

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

Question 25

what does s11(2) UCTA say?

Answer 25

-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

Question 26

what are the 5 things set out in schedule 2?

Answer 26

-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