exclusion terms

Question 1

what is an exemption clause.

Answer 1

this is a clause that is included in a contract where a party attempt to limit or restrict their liability where legal issues or disputed could arise.

Question 2

how to incorporate into a contract.

Answer 2

notice
signature
course of dealings eg timing.

Question 3

what are social uses of exemption clauses.

Answer 3

exclude a parties liability for loss or damage in the course of proceedings.
make clear where the risk of the contract lies when parts rely on them often they do not take out insurance.

reduce litigation of the parties obligations little need to ask the court to decide who is obliged to do what.

Question 4

what are the problems with exemption clauses .

Answer 4

they can often be exploited by larger companies that haver more at stake leaving the weaker party without remedy.

Question 5

the contract proferentem rule.

Answer 5

against the offeror.
this is where the contract is ambiguous open to interpretation it will be decided according to the least favourable way to the party that drafted the contract when excluding liability.

Question 6

example of contra profenretum
houghton v trafalgar insurance. 1954

Answer 6

did load mean the weight that the vehicle could carry or the amount of people in the vehicle the car was made for five people but there was six in the car. the court held that the least favourable way was the weight of the load and not the number of people that there was in the car.

Question 7

what did the courts start to say about contra preferrendum in the 20th century

Answer 7

House of Lords warned against straying from the meaning of exemption clauses. the clause must actually be ambiguous for it to be deleted using the method. meaning that it can be read in more than one way.

Question 8

what is the Canada steamship rule.

Answer 8

this is the idea that the court should not give way to exemption clauses that want to exclude personal injury or death from their liability.
a party would not want another party to sign their liability away if they were to suffer damages or loss.

wont give effect to clauses that attempt to exclude parts liability for negligence.

Question 9

facts of Canada steamship.

Answer 9

crown owned a large shed in Montreal leased the shed to Canada steamship co who stored items in the shed.
as the landlord crown have an obligation to keep shed in repair
crown employees were repairing the shed with oxygen acetylene touched highly falamble causing shed and everything in it to catch fire.
clause 7 did that they could not claim damage if anything got damaged crown said that there was a exclusion clause for negligence. but could not interpret the clause for converting negligence.

Question 10

negligence

Answer 10

taking reasonable care not to injure someone else or cause loss to people who may be effected by our actions or the way that we conduct ourselves.

Question 11

Canada steamship rule 3 tests.

Answer 11

1- expressly exclude liability for negligence or synonym of negligence will be given effect .

2- worded widely enough to cover for negligence if it is will exclude liability for negligence.

3-could clause cover some liability other than negligence if yes clause will be held to cover only that other liability and not negligence.

Question 12

2 statutory approaches to control exemption clauses.

Answer 12

the unfair contract terms act 1977
the consumer rights act 2015

Question 13

unfair contract terms act.

Answer 13

does not apply to insurance contracts and sale of land
only applies to exemption clauses.
only apply where there is business liability.

Question 14

business liability

Answer 14

ucla only applies if the person who is ensuring liability does no in he course of a business.

does not apply between two consumers.

may apply where two businesses are conflicting with one another.

does not apply to contracts between trader and consumer. these are regulated by the consumer rights act.

Question 15

negligence defined under the unfair contract terms act.

Answer 15

a- any obligation arising in the form of the expressed or implied term of a contract to take the reasonable care of expertise reasonable skill in the performance of the contract

b- common law duty to take reasonable care or expertise reasonable skill but not any stricter duty.

c- common duty of care imposed the occupiers act. making its safe for legal expected visitors.

Question 16

when does section three apply.

Answer 16

Between contracts between party’s where one of them deals on the others written standard terms of business

Applied where the exemption clause is contained in written standard terms of business which were prepared by the other party who seeks to rely on the exemption clause.

Does not apply to a contract that has been individually negotiated between the parties.

Question 17

applying words in section 3- deals.

Answer 17

deals means making a deal.if there are negotiations about the terms deal will be made on the basis of them if the party eventuality entered into those terms. if terms were significantly changed them they will be treated as a standard term.

Question 18

meaning of other standards

Answer 18

written terms and conditions
party terms are its standard terms and it habitually uses them when entering contracts.
does not have to enter every contract on those terms.

Question 19

s.3.1 others standard terms and conditions.

Answer 19

some companies have model terms that company’s can use when entering into contracts e.g. institute of mechanical engineering.
when one party presents these to another party they can argue that the contract was not the standard written terms of that party as it was not them who drafted the terms.

could also be argued that a party who habitually deals with others using model forms of contract has by practice adopted those terms.

Question 20

what is the requirement of reasonableness.

Answer 20

that terms should be fair and reasonable to be included.
should take regard for the circumstances and situations that the party are in
reasonableness must be judged at the time of the formation of the contract.

Question 21

who has the burden of proof in the requirement for reasonableness

Answer 21

the party that intends to rely upon the terms and claims that they are reasonable. s.11.5 ucta.
they have to prove that it satisfies reasonableness.

Question 22

determining reasonableness

Answer 22

• were the goods manufactured in a different way for the customer or adapted for the customer.

-did they know of the clause extent of the terms

-strength of the bargaining position of the partys.

• was there an inducement to enter into the terms or opportunity to enter into contract with others without similar terms.

-do terms exclude or limit relevant liability in some condition is not complied with whether it was reasonable at the time of the contract to expect that compliance with that condition would practice.

Question 23

what is an example of determining reasonableness.

Answer 23

hyland phillips and hmasted

hyland negligantly drove into building and caused damage for Phillips clause 8 said that Phillips was to be responsible for his work making him an employee for the duration of the work. could not sue . they argued that clause 8 was not an exclusion clause for negligence but instead transferred the responsibility. court of appeal rejected the company argument.