Exemption + Exclusion Clauses Flashcards
Exemption clause
Clark- ‘An exemption clause is a contractual term by which one party attempts to cut down either the scope of his contractual duties or regulate the other party’s right to damages or other remedies’.
What are the two types of exemption clause?
exclusion clause + limitation clause
Exclusion clause
McDermott- a clause which seeks to exclude or limit liability for breach of contract or other liability as may be found at common law or under statute.
Limitation clause
More specific, aims to restrict the remedies available to one of the parties in the event of a breach. Ie/cap on amount of damages/ act within specific time limit etc.
Incorporation of the exclusion clause
These clauses are usually not brought to the attention of the contracting party. 3 main ways:
- incorporation by signature
- Incorporation by notice
- Incorporation through a previous course of dealing
Lestrange v Graucob
if clause forms part of signed contract, it is incorporated whether party read it or not.
Curtis v Chemical Cleaning
clause will not be incorporated where it was obtained through misrepresenting its consequences
Test for exclusion clauses
has it been incorporated into the contract/ does the wording of the clause exclude the breach which has occurred/ is it affected by any legislation?
Olley v Marlborough Court
timing of notice is critical - must occur before entering into contract
Thornton v Shoe Lane Parking
terms viewed after the contract is formed cannot be incorporated into the contract
Test for Incorporation by notice
clause is deemed incorporated if ‘reasonably sufficient’ notice of it has been brought to the attention of the other party
Incorporation through a previous course of dealing
If parties enter into series of contracts with exemption clauses, reasonable notice may be deemed to exist on previous course of dealings.
