Theory-Nature and Effectiveness of Exclusion Clauses

Question 1

When might one party try to take advantage of the other through exclusion clauses?

Answer 1

Where there is a disparity in the power of the two parties in the contract

Question 2

Give an example of how a larger party can exploit a smaller party of a contract through exclusion clauses.

Answer 2

Businesses can use exclusion clauses in their terms and conditions which they know consumers don’t usually read in full.

Question 3

3 ways the law tries to guard against exploiters of exclusion clauses.

Answer 3

1. Rules of inclusion (must be incorporated into the contract)
2. Contra proferentem rule
3. s.69 of CRA 2015 states that if a term “could have different meanings” then that which favours the consumer prevails.

Question 4

1st way in which arguably there is not enough in place for protection from exploiters of exclusion clauses.

Answer 4

1. Little in place to protect small businesses (e.g., in a contract between a small and large company)

Question 5

2nd way in which arguably there is not enough in place for protection from exploiters of exclusion clauses.

Answer 5

2. Arguably CRA 2015 does not fully protect consumers as it still allows for exclusion clauses in standard contracts

Question 6

3rd way in which arguably there is not enough in place for protection from exploiters of exclusion clauses.

Answer 6

3. Some cases appear to show the courts reaching a contradictory judgement in different cases.

Question 7

4th way in which arguably there is not enough in place for protection from exploiters of exclusion clauses.

Answer 7

4. Despite Contract (Rights of Third Parties) Act 1999, a carefully written contract can still exclude third parties from the benefits of a contract.