Exclusion Clauses

Question 1

What are the key elements of an Exclusion Clause?

Answer 1

• Incorporation - Is clause in contract?
• Construction - Is loss covered by clause?
• Legislation - Is clause legally permitted?

Question 2

What are the rules of Incorporation?
- including Onerous terms

Answer 2

Bound by Signature
- L’Estange v Graucob

Reasonable notice
- Thornton v Shoe Lane Parking

Previous Dealings
- Hollier v Rambler Motors

Onerous terms need extra notice
- Interfoto v Stiletto

Question 3

What are the rules of Construction?

Answer 3

Clause not permitted if destroys purpose of contract
- Glynn v Margetson

Only Exempt from what clause explicitly says
- Andrew Bros v Singer

Contra Preferentum Rule
- Wallis, son and Wells v Pratt and Haynes

Question 4

Which Legislation is referred to when considering exclusion clause credibility?

Answer 4

• Consumer Rights Act 2015 (CRA 2015)
• Unfair Contract Terms Act 1977 (UCTA 1977)

Question 5

What does the CRA 2015 state for Exclusion Clauses?

Answer 5

Cannot exclude:
- Death/Personal injury
- Breach of terms as to goods (s9-11)
- Breach of terms as to services (s49-52)

Unfair contract on consumer isn’t binding
- Unfair = Significant Imbalance

Question 6

What does the UCTA 1977 state for Exclusion Clauses?
- Supporting Cases?

Answer 6

Cannot exclude:
- Death/Personal Injury

Only Valid if reasonable:
- loss from D’s negligence (Smith v Evans)
- failed/part/different performance

Question 7

What is the test for reasonableness when considering UCTA 1977?
- Supporting Cases?

Answer 7

• Strength of bargaining power (Watford Electronics v Sanderson CFL)
• Whether customer was induced to agree
• Whether customer knew of existence/extent of term
• Whether gods were customer special order