Exemption clauses Flashcards
Define an exemption clause.
A contractual term that purports to limit or exclude a liability that would otherwise attach to one of the contracting parties.
Which 3 points need to be considered when considering if a party can rely on an exemption clause?
1- incorporation
- was clause incorporated into contract (‘reasonable notice’)
2- construction
- does clause, as drafted, cover alleged breaches?
3- statutory controls
- What’s the effect on clause of UCTA and CRA?
What does Contra Proferentem mean?
Any ambiguity in the clause will be construed against the proferens (person relying on clause)
Can liability for negligence ever be excluded? apply test from Canada Steamship Lines
test:
a- Does clause specifically refer to negligence?
b- if it doesn’t, are words used wide enough to cover negligence? (if not, they don’t cover negligence)
if they are wide enough, ask:
- is clause too wide?
* if clause is too wide courts will not interpret clause as referring to negligence, if not too wide, then effectively excluded negligence.
What is the purpose of UCTA
(a) Certain types of exemption clause have no effect; and
(b) Other types of exemption clause are effective only so far as they satisfy the requirements of reasonableness.
What are the 3 scopes of UCTA?
1- provisions don’t apply to consumer contracts
2- s 2-7 only apply to business liability
3- only regulates exemption clauses
Define business liability.
Liability for breach of obligations or duties arising:
- from things done in course of business
- occupation of premises used for business
How is negligence defined in UCTA?
(a) Any obligation, arising from the express or implied terms of a contract, to take reasonable care or exercise reasonable skill in the performance of the contract;
(b) Any common law duty to take reasonable care or exercise reasonable skill
LEFT OUT NEGLIGENCE LIABILITY!!!
When does the reasonable test apply where exempting liability arises in contract?
where the term limited liability is in a party’s standard terms, only valid if reasonable.
What is the reasonable test for UCTA?
..shall have been a fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made.
Which exemption clause will be void as a result of the Unfair Contract Terms Act 1977?
A clause excluding liability for death or personal injury resulting from negligence.
Can a trader exclude death or personal injury as a result of negligence towards a consumer (in CRA)?
A trader cannot by a term of a consumer contract or by a consumer notice exclude or restrict liability for death or personal injury resulting from negligence
How is negligence defined under CRA?
(a) Any obligation, arising from the express or implied terms of a contract, to take reasonable care or exercise reasonable skill in the performance of the contract;
(b) Any common law duty to take reasonable care or exercise reasonable skill; and
(c) The common duty of care imposed by the Occupiers’ Liability Act 1957.
Are exempting liabilities for breach of statutory implied terms about goods and digital content binding? Name the terms then answer!
- satisfactory quality
- fit for purpose
- to be as described
= not binding
