Terms and Exclusion Clauses Flashcards
What are the three categories of contract?
Traders and Consumers.
Business to business.
Private.
Describe the common law rules on exclusion clauses.
The common law approach in relation to all 3 types of contract is that parties may agree that liability of breach of terms may be excluded or limited, subject to the common law rules on incorporation and interpretation (contra proferentem).
To be binding and operable, the clause must be incorporated into the contract as a term through what?
Signature (L’Estrange)
By notice (they must have had knowledge of it at the time of contract) (Olley)
A ticket with an exclusion on the back is not sufficient (Thornton); If they dealt on the same terms in the past this can be implied knowledge if there was sufficient frequency (Hollier).
What is the ‘Contra Proferentem rule’ and why is it important?
The clause must also pass the test of construction ‘Contra Proferentem rule’. It must be interpreted by the court to see if it will achieve what it is meant to do.
What does the CRA 2015 prohibit in relation to exclusion clauses?
The CRA 2015 prohibits any exclusion clause or limitation of liability by a trader for breach of the implied terms in relation to contracts for the supply of goods and for the supply of services.
What section numbers relate to the CRA 2015 and exclusion clauses?
s31 - Prohibits a term excluding or limiting liability with respect to the sale of goods under s9, s10 and s11.
s50 - Prohibits a term that information provided about the trader of service to be binding.
s57 - Prohibits a term excluding or limiting liability, for the supply of services under s49 (service to be preformed with reasonable care and skill).
s65 - Prohibits exclusion or restriction of liability for death or personal injury resulting from negligence.
What does the Unfair Contracts Terms Act 1977 impose?
The Unfair Contracts Terms Act 1977 imposes some restrictions on the exclusion of or limitation of liability under common law rules between businesses.
What are the sections regarding the Unfair Contracts Terms Act 1977 and restrictions of liability?
s2 (1) - A person cannot avoid liability for death or personal injury caused by negligence; in the case of loss or damage, a person cannot exclude or restrict their liability for negligence except where the term or notice satisfies the requirement of unreasonableness.
s3 - A party dealing on the other parties written standard of terms of business, a term specifically excluding or limiting liability for the breach of any contractual term must satisfy a test of reasonableness.
Define reasonableness under the Unfair Contracts Terms Act 1977.
Reasonableness (Under s11) - It is whether the insertion of the term in the contract is reasonable in the light of what was known to the parties at the time when the contract was made.
Are there any statutory restrictions on terms in private contracts?
There are no statutory restrictions on terms in private contracts.
What are express terms?
Terms written into a contract.
How can terms be implied by common law?
Terms can be implied by common law in two ways:
Through business efficacy and the officious bystander test.
