Exemption Clauses Flashcards
What is an exemption clause?
Contractual term that purports to limit or exclude a liability that would otherwise attach to one of the contracting parties.
What are the three steps when considering whether a party can rely on an exemption clause?
- Incorporation- is it part of the contract?
- Construction- does the caluse cover the alleged breach and resulting loss?
- Statutory controls- effect under UCTA and CRA.
What does contra proferentem mean>
If there is any doubt as to the meaning and scope of the exemption clause, the ambiguity will be resolved against the party seeking to rely upon it.
(less likely to apply if contract between commercial parties of equal bargaining power)
Third parties and exemption clauses?
A party outside the contract cannot benefit from its terms.
Exemption clauses and negligence?
clear words must be used if a party is seeking to exclude liability resulting from its own negligence.
What types of contract does UCTA 1977 apply to?
Business to business
What are the two ways that UCTA manages exemption clauses?
- Clause has no effect.
- effective only to satisfy the requirements of reasonableness.
UCTA and exemption clauses about negligence?
S2(1)- any attempt to exclude or restrict liability for death or personal injury resulting from negligence will be void.
s2(2)- a person cannot exclude or limit his liability for negligence except in so far as the term or notice satisfies the requirement of reasonableness.
UCTA and breach of s12-15 sale of goods act?
s6- cannot be excluded or restricted except if it satisifes the requirements of reasonableness.
UCTA AND breach of contract?
as long as the term passes the reasonable test. Where a party deals on its own written standard terms of business.
UCTA and not written standard terms of business?
not regulated by UCTA unless the relate to areas which are regulated by other areas of UCTA.
what is the reasonable test in UCTA?
TERM 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 or in the contemplation of the parties when the contract was made.
what are some of the reasonableness test factors?
- strength of bargaining positions.
- whether customer received an inducement to agree to the term
- whether the customer knew or ought to reasonably have known of the existance and extent of the term.
- goods were special order.
Negligence and CRA 2015?
A trader cannot by a term of a consumer contract or by a consumer notice exclude or restrict personal laibility for death or personal injury resulting from negligence.
CRA 2015 and s9-11 of CRA 2015
any attempt to exclude or restrict liability for s9-11 (quality, purpose and description) will not be binding on the consumer.
CRA 2015 AND digital content?
not binding.
CRA 2015 AND imlied terms about services?
any attempt to entirely exclude s49 will not be binding.
any attempt to restrict liability will not be binding to the extent that it would prevent the consumer from recovering the price paid.
CRA 2015 AND UNFAIRNESS?
not binding if unfair. must cause a significant imabalance in the parties’ rights and obligations under the contract to the detriment of the consumer.
