T5 exemption clauses and UCTA Flashcards
Exemption clauses definition
Invoked in the event of a breach of contract.
2 types of EC: INCORPORATION & construction and interpretation
has the term been properly incorporated into the contract. The timing of incorporation must be before or at the time of entering the contract
Case example: Curtis V Chemical cleaning [1951]
The claimant took her wedding dress to the cleaners. She was asked to sign a form. She asked the assistant what she was signing, and the assistant told her that it excluded liability for any damage to the beads and sequins. The form in fact contained a clause excluding all liability for any damage howsoever caused. The dress was returned badly stained.
2 types of EC: incorporation & CONSTRUCTION AND INTERPRETATION
does the term cover the loss in question and is it free from ambiguity?
> Clear words must be used and they must cover the liability in question.
Case example: Andrews Bros ltd v Singer Cars [1934]
By contract the claimants agreed to buy some ‘new Singer cars’ from the defendant. The contract contained a term which excluded ‘all conditions, warranties and liabilities implied by statute, common law or otherwise’. One of the cars delivered was not new but had been used on the road. The claimant sought to reject the car, but the defendant argued that the clause was effective to prevent him being able to do so since the term implied by s.13 Sale of Goods Act requiring goods to be as described was excluded. The clause was not effective since it did not cover the loss in question. The requirement of the cars being new was an express term not an implied term. Whilst the Sale of Goods Act implies a term that goods must be as described any ambiguity in the effect of the clause would be interpreted against the party seeking to rely upon it under the contra proferentum rule.
contractual document
> The document signed Is only binding if it can be established that it is a contractual document.
whether or not a document is a contractual one depends upon the facts of the case
Case example: Chapelton V Barry UDC [1940]
The claimant hired a deck chair from Barry UDC for use on the beach. There was a notice on the beach next to the deck chairs stating that the deck chairs could be hired at 2d for three hours and also ‘respectfully requested’ the public to obtain tickets issued by the chair attendants. The claimant obtained a ticket and put it in his pocket without reading it. In fact there was an exclusion clause printed on the ticket excluding the council’s liability for personal injury caused in using the deck chair. The claimant was injured when he sat on the chair. The fabric of the deck chair split away from the frame. He brought an action against the council, and they sought to rely on the exclusion clause contained in the ticket. The exclusion clause was not incorporated into the contract. A reasonable person would regard the ticket as nothing more than a receipt and would not expect it to contain contractual terms. Furthermore, the wording of the notice suggested that a person could obtain the deck chair and get a ticket later. The notice constituted an offer and collecting the chair would amount to acceptance. It would not be open to the council to introduce new terms after the contract had been formed.
Statuary regulation of exemption clauses:
- Limitation clauses seek to limit the liability of a party
- Exclusion clauses seek to exclude liability completely
Example: UCTA 1977 & CRA 2015 put unfair terms under the microscope and renders the terms either:
- Automatically ineffective
- Unreasonable
contra proferentem rule
where a clause contains an ambiguity, the Court will interpret it against the party seeking to rely upon it.
unfair contract terms act 1977 (UCTA)
“Legislation which imposes limits on
the extent to which civil liability for
breach of contract, for negligence or
other breach of duty, can be avoided
by means of contract terms and
otherwise”
S.2 consumer rights act 2015 “dealing as a consumer”
“Trader”… a person acting for purposes relating to that person’s trade, business, craft or profession.
“Consumer” means an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession.
(Does not apply if the goods are second hand goods sold at public auction and individuals have the opportunity of attending the sale in person).
reasonableness
S.11. UCTA states that all terms must pass the test of reasonableness if they are to be allowed–> test for reasonableness can be found in schedule 2 to the act
Case example: Woodman v Photo Trade Processing ltd (1981)
The strength of the relative bargaining positions of the parties, including the availability of alternative sources for the buyer
ineffective terms
In some situations, UCTA will deem the term ineffective regardless of whether it meets the test of reasonableness.
S.2 (1) UCTA 1977 (S.65 CRA 2015)
S.2 (2) UCTA 1977
Q: Under the Common law, what is the general rule regarding the timing of the presentation of the exemption clause?
Before/at time of contract formation
Q: Can the terms implied by sections 13, 14 and 15 Sale of Goods Act 1979 (or the corresponding provisions under the CRA 2015) ever be excluded from a contract for the sale of goods?
> Consumer contract No
Business contract yes
Q: What are the two main methods of common law control of these clauses?
Contra Proforentum [1]
Explanation [1]
Incorporation [1]
Signature [1]
Notice [1]
Contractual Document [1]
