Exclusion clauses Flashcards
Paper 3 Section B:Contract Law
Definition
Limit or exclude liability if the contract has been breached (Transocean v Providence Resources)
Incorporation rules
Signed agreements- Signing a contract means you are bound by the terms in it, but if you query and are told something different then this will be followed (L’Estrange v Graucob Curtis v Chemical Cleaning and Dyeing Co)
Red Hand Rule- Must be reasonable steps to bring the clause to the other person’s attention before the contract is made (Olley v Marlborough Court Hotel)
Tickets- Exclusion clauses must be on contractual documents (Thornton v Shoe Lane Parking)
Prior dealings
If the parties have contracted together before, it could be implied they should know about certain rules (McCutcheon v David MacBrayne)
CRA 2015 automatically unfair terms
Restricts exclusion clauses between consumers and traders
S31- Bars any limitation or exclusion of Section 9,10,11s rights
S57- Bars any limitation or exclusion of rights protecting the rendering of services
S65- Prohibits clauses which limit or exclude liability for death or serious injury
S62 CRA 2015 fairness
Under S62, all terms within a consumer contract must be fair
S62(1) Unfair terms are not binding
S62(3) Does not prevent a consumer from relying on a term if they choose to
S62(4) Unfair if it causes a significant imbalance in parties rights and obligations,
coupled with the grey list of unfair terms: disproportionate charges, require consumers to pay for services which have not been supplied by the time the contract ends, allow the trader to change the prices after the consumer is bound but this must be transparent and prominent
UCTA 1977 automatically unfair terms
Used in contracts between two traders
S2(1) Cannot exclude or limit liability for death or serious injury
S3 Imposes all terms must be reasonable and this is assessed in S11
Reasonableness
S11(1) Was it known or ought to reasonably known or be in the minds of the parties at the time the contract was made (Smith v Eric S Bush)
S11(2) Was the term reasonably in line with SOGA or SGSA rights as these cannot be excluded (Watford Electronics v Sanderson CFL)
S11(4) Limitation clauses
a. Resources heed are available if they limit a term
b. How far it was open to the party to cover himself by insurance
S11(5) D has the burden of proof to show that their exclusion clause was reasonable (Warren v Trueprint)
Contra Proferentem Rule
Where there is uncertainty in the exclusion clause, it will be interpreted against the person trying to incorporate the term
