Exclusion Clauses - common law

Question 1

What 2 principles did courts use before statutory protection for exclusion clauses?

Answer 1

1. Courts used Rules of Incorporation (how clauses are included in contracts) and
2. Rules of Construction (how clauses are interpreted)

Question 2

What is the significance of Signature in incorporating exclusion clauses?

Answer 2

A signature generally binds a party, even if the terms aren’t read (e.g., L’Estrange v Graucob [1934])

Question 3

What is Reasonable Notice in incorporation?

Answer 3

Terms must be brought to the other party’s attention before or at contract formation (e.g., Parker v South Eastern Railway [1877])

Question 4

What is the rule for Unusual/Onerous Clauses?

Answer 4

Courts require clear notice for onerous clauses (e.g., Spurling v Bradshaw [1956])

Question 5

What role do Previous Course of Dealings play in incorporation?

Answer 5

Consistent prior dealings can incorporate exclusion clauses (e.g., Kendall v Lillico [1969]), but inconsistency prevents incorporation (e.g., McCutcheon v David MacBrayne Ltd [1964])

Question 6

How are exclusion clauses interpreted?

Answer 6

Ambiguous clauses are interpreted against the party relying on them using the contra proferentem rule

Question 7

How do courts treat clauses excluding negligence?

Answer 7

Clauses must explicitly exclude negligence to be valid (e.g., Canada Steamship Lines Ltd v The King [1952]).

Ambiguous clauses are not enforceable

Question 8

How do courts interpret ambiguous clauses in commercial contexts?

Answer 8

Courts apply a contextual approach rather than strict rules (e.g., Transocean Drilling UK Ltd v Providence Resources [2016])

Question 9

What happens if there’s a misrepresentation regarding an exclusion clause?

Answer 9

Misrepresentation invalidates reliance on an exclusion clause (e.g., Curtis v Chemical Cleaning and Dyeing Co [1951])