Exclusion Clauses Flashcards
Exclusion clauses are
Risk allocation devices
Exclusion: Express term in Contract that exempts one party from liability for breach
Limitation: A clause in the contract that limits the liability of one of the parties
3 Hurdles for a party seeking to rely on Exclusion Clause:
1) Is the Clause Incorporated into the Contract?
2) Deos the Clause, properly interpreted, Cover the loss?
3) Is there another rule of Law that Invalidates the clause?
Incorporation of Exclusion clauses (same as incorporation of regular clauses)
Incorporation by Signature:
L’Estrange v Graucob
Incorporation by Notice:
Time of notice at contracting:
Olley v Marlborough Court
Form of Notice:
Chappelton v Barry
Degree of Notice:
Parker v South Eastern Railway
Interfoto v Stiletto
Overriding Oral Warranty
If you give an oral warranty that trumps the exclusion clause then the warranty will prevail
Evans v Merzario
Contra Preferentum Rule:
Exclusion clauses are construed against the party who is seeking to rely on it
Only excludes if clearly done
Interpretation fo Exclusion Clasues
Canada Steam Ship Lines:
1) It is clear/unambiguous and it covers the loss
2) If Negligence was not referred to, the court must consider if it is wide enough to cover the loss on its ordinary meaning
3) If not clear and there is another possible grounds for interpretation then go with that
Hollier v Rambler Motors (negligence)
Limitation Clauses
These are interpreted much less restrictively than Exclusion Clauses
Britvic Soft Drinks v Messer
Fundamental Term
No term can exclude liability for a breach of a fundamental Term:
Karsels v Wallis
EXCEPT: if they are sophisticated parted who wish to construe a term so narrowly that it applied to a fundamental breach:
Photo productions v Securicor
Excluding Misrepresentation
You can exclude Misrep so long as it is reasonable for you to do so
Cremdean Properties v Nash
Unfair Contract Terms Act
Applies to Business to Consumer and Business to Business where 1 acts as consumer Transactions.
It references Sale of Goods Act and your inability to exclude liability from that
Unfair Contract terms Act Test of Reasonableness
The test of Reasonableness is set out In s.11 and Schedule 2
Watford Electronics v Sanders
Mitchell v finney Lock Seeds
Smith v Eric Bush
Unfair Terms in Consumer contract Regulations
Fairness test is applied to all “non-individually negotiation” “non core term” contracts between a consumer and a business
Idea is to protect the consumer in the EU market
Oceano group v Quintero
UTCCR Effects and Determining Unfairness
-Term is Struck out from the Contract
Unfair:
1) Contrary to good faith
2) Causes Imbalance in rights/liabilities
3) Imbalance is to the detriment of Consumer
Director General of Fair trading v First National Bank
Differences Between UTCCR and UCTA:
1. Type of Dealing
UTCCR applies to all types of consumer Contracts
UCTA excludes certain contracts
Differences Between UTCCR and UCTA:
2.Consumer definition
UTCCR is only between seller and natural consumers
UCTA is between consumers to Business or Business to Business where 1 acts as consumer
Differences Between UTCCR and UCTA:
3. Standard form or negotiated
UTCCR- only applies to standard form and non negotiated contracts
UCTA- Applies to both standard form and negotiated contracts
Differences Between UTCCR and UCTA:
4. Types of Clauses
UTCCR applies to all kinds of consumer terms except core terms
UCTA only applies to Exclusion and Limitation clauses
Differences Between UTCCR and UCTA:
5. Black list or Grey List
UTCCR lis of terms presumed unfair in ached 2
UCTA guidelines for applicability of reasonableness test
Differences Between UTCCR and UCTA:
6. No effect at all
UTCCR doesn’t strike out any clauses immediately
UCTA will simply strike out some exclusion clauses right away
Differences Between UTCCR and UCTA:
7. Test
UTCCR is a fairness Test
UCTA is a reasonableness Test
Differences Between UTCCR and UCTA:
8. Burden of Proof
UTCCR burden of proof on consumer to prove term unfair
UCTA puts burden of proof on party that is seeking to rely on the clause
Differences Between UTCCR and UCTA:
9. Effectiveness of other parties
UTCCR office of fair trading can bring an action on an individuals behalf
UCTA only in respect to the 2 parties involved
Differences Between UTCCR and UCTA:
10. Enforcement across UK
UTCCR applies to all of the Nations of the UK equally
UCTA has different rules for Scotland
Mistake
- AS to Existence of Subject Matter
- As to identity of subject matter
- AS to Possbility of Performing
- AS to Quality of Subject Matter
Found=void
