exemption clauses

Question 1

what is an exemption clause?

Answer 1

a term in a contract which in some way limits liability if one of the parties breaks the contract

Question 2

what are the two types of exemption clauses?

Answer 2

exclusion clauses - seek to eliminate possibility of liability all together
limitation clauses - seek to limit liability

Question 3

what’s the first way in which the courts consider the validity of an exemption clause?

Answer 3

incorporation - has the clause been properly inserted into the contract

Question 4

what are the three ways a clause can be incorporated?

Answer 4

by signature, by reasonable notice, by previous dealings between the parties

Question 5

what are the rules about a clause being incorporated by reasonable notice?

Answer 5

notice must have been before or at time of making contract (Olley v Marlborough Court), must be found in a document of a contractual nature not somewhere where you wouldn’t look for T&C’s, if a clause is particularly onerous more should be done to bring it to the attention of the other party

Question 6

what are the rules for a clause being incorporated by previous dealings between the parties?

Answer 6

parties have dealt regularly and consistently, on the same terms and conditions, over a sufficient period of time

Question 7

what’s another way in which the courts consider the validity of an exemption clause?

Answer 7

construction - meaning of the clause. does the clause cover the complaint that has been made

Question 8

what is the contra proferentem rule (related to construction of exemption clause)?

Answer 8

any ambiguity or doubt contained in an exemption clause will be resolved against the party trying to rely on the clause. it will be in favour of the person on the wrong end of the clause

Question 9

what must be said to exclude liability for negligence in an exemption clause?

Answer 9

you have to use the word negligence or a set of words that mean the same as negligence in the exemption clause

Question 10

how can an exemption clause exclude liability for a fundamental breach?

Answer 10

if it is explicitly clear that that is what the parties intended

Question 11

what is the other way in which the courts consider the validity of an exemption clause?

Answer 11

legislation, legislative controls are far more extensive in their reach

Question 12

what is the act which applies to contracts between trader and consumer?

Answer 12

Consumer Rights Act 2015.

Question 13

what does part 1 CRA set out?

Answer 13

sets out protections for a consumer buying goods, services or digital content. implies certain minimum standards the goods must comply with. sets out specialised remedies available to a consumer if goods do not meet the minimum standards

Question 14

what does part 2 CRA set out?

Answer 14

sets out a regulatory framework for unfair terms. s65 prohibits exemption clauses excluding liability for death/personal injury. terms that are not in the prohibited categories are permitted as long as they meet requirement of fairness

Question 15

what is the act in relation to business liability where CRA does not apply?

Answer 15

Unfair Contract Terms Act 1977. only applies to exemption clauses

Question 16

how does UCTA regulate exemption clauses?

Answer 16

by prohibition and are permitted if they meet requirement of reasonableness if not prohibited