Exclusion & limitation clauses

Question 1

What is an exclusion clause?

Answer 1

Term in contract that prevents one party being liable for a breach of contract

Question 2

What is a limitation clause?

Answer 2

Term in contract that sets an upper limit on liability for breach of contract

Question 3

What are the three ways to establish a term as part of a contract?

Answer 3

-agreement signed
-notice with the term in it incorporated in contract
-whether the term is incorporated from previous dealings of the parties

Question 4

What case relates to whether the agreement is signed?

Answer 4

L’Estrange v Graucob

Question 5

What is the case of L’Estrange v Graucob

Answer 5

Expected to read the contract unless unreasonable, cigarette vending machine excluded warranty in terms

Question 6

What is the case of Curtis v Chemical Cleaning and Dyeing Co Ltd?

Answer 6

If something is orally stated that takes precedent over written clause. Wedding dress stained only said limited beads and sequins

Question 7

What case is related to the term being incorporated in the contract?

Answer 7

Olley v Marlborough Court Hotel

Question 8

What is the case of Olley v Marlborough Court Hotel?

Answer 8

Exclusion clause had not been known when contract was made. Hotel booking made at desk exclusion for liablitiy of belongings in hotel room after contract made

Question 9

Chapelton v Barry Urban District Council?

Answer 9

It was unfair to assume that mr C would understand that the receipt was a contractual document with exclusion clause for injury contained on it so council liable

Question 10

What case satates being illiterate is no excuse for not understanding a clause?

Answer 10

Thompson v London, Midland and Scottish Railway Co

Question 11

What is the case of Thompson v London, Midlands and Scottish Railway Co?

Answer 11

Ticket pointed to conditions excluding injury Mrs Thompson being illiterate did not alter legal position

Question 12

What is the case of Thornton v Shoe Lane Parking Ltd?

Answer 12

Clause only incorporated if transparent at time of purchase. Parking terms inside car park not at entrance

Question 13

What does Hollier v Rambler Motors state?

Answer 13

If the parties have dealt on the same terms in the past it is possible to imply knowledge of the clause. Courts reluctant to find that to be the case

Question 14

What is the case of McCutcheon v David MacBrayne Ltd?

Answer 14

Often used ferry when got on signed receipt exclusion on it. Didn’t always read it ferry sank car destroyed. Courts stated should not have assumed claimant knew

Question 15

What does The Contract (Rights of Third Parties) Act 1999 state about third parties and exclusion clauses?

Answer 15

Third parties can rely on exclusion clauses providing the other requirements of the Act are met

Question 16

What is the Contra Proferentem rule?

Answer 16

Where there is doubt about the meaning of a term in a contract, the words will be construedagainst the person who put them in the contract

Question 17

What is a case example of the Contra Proferentem rule?

Answer 17

Transoceanic Drilling UK Ltd v Providence Resources Plc

Question 18

What is the case of Transocean Drilling UK Ltd v Providence Resources Ltd?

Answer 18

The Contra Proferentem rule is one to be used where the term is both one sided and ambiguous. If meaning clear do not use

Question 19

What does the Unfair Contract Terms Act 1977 provide?

Answer 19

Protection against exclusion clauses in non-consumer contracts

Question 20

What is s 2(1) of The Unfair Contract Terms Act 1977?

Answer 20

Person cannot exclude liability for death or personal injury caused by negligence

Question 21

What is s 2(2) of The Unfair Contract Terms Act 1977?

Answer 21

Cannot exclude or restrict liability for negligence if unreasonable to do so

Question 22

What is s 6(1) of The Unfair Contract Terms Act 1977?

Answer 22

Implied condition as to the title cannot be excluded

Question 23

What is s 3 of The Unfair Contract Terms Act 1977?

Answer 23

Imposes reasonableness test where one party subject to others standard

Question 24

What is s 11(5) of The Unfair Contract Terms Act 1977?

Answer 24

Requires party who inserts clause and seeks to rely on it to show it is reasonable in all circumstances

Question 25

What is the case of Warren v Trueprint Ltd

Answer 25

Defendants only responsible for replacement film if fail to print photos. Unable to show clauses was reasonable when lost couples silver wedding photos

Question 26

What three sections of The Unfair Contract Terms Act 1977 contain the tests for unreasonableness?

Answer 26

S11(1)
S11(2)
S11(4)

Question 27

What test is found in S11 (1) The Unfair Contract Terms Act 1977?

Answer 27

Whether the insertion of the term was reasonable in light of what the parties knew at the time (knowledge test)

Question 28

What case relates to the knowledge test?

Answer 28

Smith v Eric S. Bush

Question 29

What is the case of Smith v Eric S. Bush?

Answer 29

Surveyors who made error had exclusion excluding liability for accuracy of the report. Seen as unreasonable

Question 30

What test does S11(2) of The Unfair Contract Terms Act 1977 contain?

Answer 30

Covers exclusion clauses involving breach of Sales of Goods Act 1982 b2b

Question 31

What are the 5 points laid out in s 11(2) of The Unfair Contract Terms Act 1977?

Answer 31

-Strength of bargaining position
-If customer received inducement to enter contract
-Customer knew of existence and extent of term
-term excludes or restricts any relevant liability
-goods were adapted to special order

Question 32

What is the case of Watford Electronics Ltd v Anderson CFL Ltd?

Answer 32

If two firms are of the same size and exclusion clause is reasonable

Question 33

What is the test in s 11(2) of The Unfair Contract Terms Act 1977?

Answer 33

Limitation clauses, 2 criteria:
Resource which defendant would expect to be available for meeting liability
How far it was for the defendant to cover themselves with insurance

Question 34

What is the case of George Mitchell Ltd v Finley Lock Seeds Ltd?

Answer 34

s 11(4) of The Unfair Contract Terms Act 1977 relates to limitation clauses. Farmer give bad seed

Question 35

What does the Consumer Rights Act 2015 cover?

Answer 35

Contracts between traders and consumers

Question 36

What three Sections of The Consumer Rights Act 2015 contain the bars on exclusion clauses?

Answer 36

S 31, 57 and 65

Question 37

What does S31 of The Consumer Rights Act 2015 prohibit?

Answer 37

Prohibits a term excluding or limiting liability for sections 9,10,11,14,15,16,17 (covering goods)

Question 38

What does S57 of The Consumer Rights Act 2015 prohibit?

Answer 38

Prohibits a term excluding or limiting liability for sections 49,50,51,51 (covering services)

Question 39

What does S65 of The Consumer Rights Act 2015 prohibit?

Answer 39

Prohibits exclusion or restriction of liability for death or personal injury resulting from negligence

Question 40

What does S62 of The Consumer Rights Act 2015 require?

Answer 40

Requires all consumer contract terms to be fair. Defines unfair as terms that pout the consumer at a disadvantage

Question 41

What is the fairness test supplemented by?

Answer 41

‘Grey list’

Question 42

What is the ‘grey list’?

Answer 42

Non-exhaustive list of terms that may be unfair

Question 43

What does the ‘grey list’ state about subject containing the price?

Answer 43

Price not subject to fairness if transparent and prominent