Exclusion Clauses

Question 1

What is an exclusion clause?

Answer 1

Any clause that tries to exclude liability for something

Question 2

Which 3 things does court consider to decide if an exclusion clause is valid?

Answer 2

• Whether the exclusion clause has been incorporated into the contract
• Whether Contra Preferentum applies
• Whether the term is effective under a statute

Question 3

What was said about exclusion clauses in Thornton v Shoe Lane Parking?

Answer 3

The more onerous the exclusion, the clearer it must be

Question 4

Which case shows that if a term is written in a contract and the contract is signed, it will be incorporated even if not read or understood?

Answer 4

L’Estrange v Graucob

Question 5

What is the exception from interfoto v Stiletto?

Answer 5

Unusual or onerous terms cannot be incorporated without special attention being drawn to them

Question 6

What is the exception from Curtis v CCD?

Answer 6

A statement in a contract can be varied by subsequent verbal statements

Question 7

In which cases had D taken reasonable steps to bring attention to the exclusion clauses?

Answer 7

O’Brien v MGN and Parker v SE Railway

Question 8

In which case was the exclusion incorporated due to a regular course of dealings?

Answer 8

Spurling v Bradshaw

Question 9

more for evaluation

What does the rule of contra preferentum show?

Answer 9

Where exclusion clauses are vague they will be interpreted against the person relying on it

Question 10

What does the Transocean Drilling case show about exclusions under contra preferentum?

Answer 10

If the exclusion term is clear and freely agreed to, it may be allowed

Question 11

What is the Act used for B2C contracts?

Answer 11

Consumer Rights Act 2015

Question 12

What is the test and section number for unfairness (CRA)?

- unfair terms not allowed in B2C contracts

Answer 12

S62 - a term is unfair if it is contrary to the requirement of good faith, causing a significant imbalance in parties’ rights and obligations under the contract to the detriment of the consumer’
- puts consumer at disadvantage by limiting rights or increasing obligations compared to the trader

Question 13

Which 3 things will the unfairness test never be used for (with section numbers)?

Answer 13

• exclusions about death or injury caused by negligence (S65)
• exclusions about implied rights to goods eg. satisfactory quality, fitness for purpose (S31)
• exclusions about implied rights to services (S57)

Question 14

What Act is used for B2B and C2C contracts?

Answer 14

Unfair Contract terms Act 1977

Question 15

What cannot be excluded under UCTA 1977 (with section)?

Answer 15

S2(1) - liability for causing death or personal injury by negligence cannot be excluded

Question 16

Which 4 things can be excluded under UCTA 1977 if reasonable? (with section numbers)

Answer 16

• S2(2) - excluding liability for causing property damage by negligence
• S3 - excluding liability for breach of contract
• S6(3) - excluding implied terms about goods
• S7(3) - excluding implied terms about services

Question 17

What does S11(1) UCTA apply to and what does it state?

Answer 17

• Exclusion clauses in general
• states that the term must have been reasonable based on what the parties knew at the time of making the contract (knowledge test)

Question 18

What does S11(2) UCTA apply to and what does it consider?

Answer 18

• Exclusions about implied rights to goods and services

- guidelines for deciding if these are reasonable (set out in schedule 2 UCTA)

Question 19

What are the guidelines to be considered in schedule 2 UCTA? (5)

Answer 19

• relative strength of bargaining power (if imbalance, more likely to be unreasonable)
• whether customer received any inducement to agree
• whether buyer knew or should reasonably have known about term (if unclear/hidden - unreasonable)
• whether goods were made to special order of customer
• whether liability is accepted only if certain conditions are complied with

Question 20

What does S11(4) UCTA apply to and what does it show?

Answer 20

• limitation clauses (when someone puts a limit on how much they can be liable for)
• may be reasonable based on resources of the seller and availability of insurance for the seller