Exemption Clauses Flashcards
Express Terms
Specifically agreed by the parties (writing or oral)
Must be incorporated into the contract
Implied Terms
Not expressly created but are read into the contract
- Make certain assumptions which they do not bother to spell out
- May have held previous dealings – Contain same provisions
Terms implied by Statute - Sale of Goods Act 1979
S.13 Sale of Goods Act 1979 (Goods correspond to descriptuion) - Buyer must rely on the description (1) - May still apply where the goods have been inspected (2)
- Harlingdon & Leicester Enterprises
2. Beale v Taylor
Incorporation of Exemption Clause - Signature - Clause must be Legible and signed by C in a Contractual Document (1) - If Clause is Misrepresented = Invalid (2)
- L’Estrange v Graucob Ltd
2. Curtis v Chemical Cleaning
Incorporation of Exemption Clause - Notice - Document containing the Clause must be Contractual in Nature – Would a Reasonable person expect it to contain terms of a contract?
Chapelton v Barry Urban District Council
Incorporation of Exemption Clause - Notice - Constructive Notice – Party relying on the clause must have taken Reasonable steps to bring it to the other’s notice
Parker v SE Railway
Incorporation of Exemption Clause - Notice - Constructive Notice – Factors determining whether or not steps taken were Reasonable;
Spurling v Broadshaw
- Position
- Prominence
- Onerous or Unusual
Incorporation of Exemption Clause - Notice - Constructive Notice – Onerous or Unusual
- Must be explicitly drawn to the attention of the other party (i.e.: red hand pointing to it in red ink – Denning MR)
- Onerous clause printed on the foot of a delivery note is not explicit enough
- Reasonable steps must occur before the contract is finalized
- Thornton v Shoe-Land Parking Ltd
- Interfoto v Stiletto
- Olley v Marlborough
Incorporation of Exemption Clause - Dealings must be both consistent and amount to a ‘Course of Dealings’
Kendall v Lillico & Sons
Except;
1.Parties had dealt with each other many times however, the document containing the exemption clause had been signed and sometimes it hadn’t = Inconsistent Dealings - McCutcheon v MacBrayne
Matter of Construction, the Clause covers the Breach of Contract and Loss of Damage which has occurred - The Contra Proferentem Rule
Houghton v Trafalgar Insurance
If a party tries to rely on a clause which is Ambiguous or Unclear, the Court will Interpret the clause Against them
Matter of Construction, the Clause covers the Breach of Contract and Loss of Damage which has occurred - Exemption Clause for Negligence
Canada Steamship
Clear Words are needed to Exclude liability for Negligence, but if the wording is Clear, the word ‘Negligence’ need not be used
Matter of Construction, the Clause covers the Breach of Contract and Loss of Damage which has occurred - Exemption Clause for Very Serious Breaches of Contract
Photo Productions Ltd v Securicor
- Simply a Matter of Construction whether the Exemption clause covers the breach
- Wording must be Very Clear
- The Reasonableness Test
S.11 UCTA 1977
The Exemption Clause must have been a Fair and Reasonable one to include having regard to the Circumstances which;
- Were known to the Parties; or
- Ought to have been known by the Parties; or
- Were within the Contemplation of the parties when the Contract was made
In the case of advice
Smith v Eric Bush
- Where the Parties of Equal Bargaining Power?
- Would it be Reasonably Practicable to obtain the advice from an Alternative Source?
- How Difficult is the task?
- What are the Practical Consequences?
Standard Industry terms are generally reasonable
Schenkers v Overland Shoes
