Exclusion & Limitation Clauses^ Flashcards
Exclusion & Limitation Clauses
limit liability for breach of the contract
Courts allow for parties to agree any terms they like under freedom of contract
But one party may be on a stronger position than the other, so the courts have found ways to limit their effectiveness by considering
- If the clause is part of the contract
Is It Part of a Contract?
whether the agreement is signed
- if there was a signed written, then courts accept agreement
Effect of an oral statement
- answer to q’s accepted as a term
L’Estrange V Graucob
signed written document = courts accept agreement of terms even if unread
it will be diff since the introduction of the Consumer Rights Act 2017
- can’t exclude liability to implied terms
Curtis V Chemical Cleaning
if you have a question about the contract, whatever the response is the term of the contract
No Written Agreement
Whether any notice with the term in it is incorporated in the contract
- were you told about EC before agreement
Whether the term is incorporated as a result of previous dealing with the parties
Olley V Marlborough
They weren’t made aware of the exclusion clause before the agreement
Thornton V Shoe Lane Parking
Notice was given after the agreement was made, so not part of the contract
Hollier V Rambler Motors
Exclusion clauses may be implied in the contract because of prior dealing with the party but only if its frequent enough
The Contra Proferentem Rule
Where there is doubt about the meaning of a term in a contract, the words will be used against the person who put them there
Companies try to exclude liability with vague terms
McCutcheon V David MacBrayne
Not part of the contract as too vague if the exclusion clause is always part of the contract
Transocean Drilling UK Ltd V Providence Resources plc
EC is not clear, but because of the agreement being sophisticated, it stood
- “the rule is used when the term is both one-sides and ambiguous”
Consumer Rights Act 2015
statutory controls
excluding liability for implied terms
can’t exclude it for death or personal injury resulting from negligence
Restriction of Terms
Statutory controls
The Fairness Test
- not allowed to use unfair terms in a contract
The Grey List
- list of examples of unfair terms
Terms that are the main subject matter of the agreement
The Fairness Test
not allowed to use unfair terms in a contract
s.62 of CRA 2015 – defines what an unfair term is
Those which put the consumer at a disadvantage by limiting the consumers’ rights or disproportionately increasing their obligations
Terms that are the main subject matter of the agreement
Must be transparent - in plain and intelligent language
Must be prominent – brought to consumer’s attention so they are aware of the term
