Contract Terms: Exclusion Clauses

Question 1

What are exclusion clauses?

Answer 1

Exclusion clauses may be inserted into a contract in order to exclude liability for breach of contract or remedies

Question 2

What must the exclusion clause be?

Answer 2

Incorporated into the contract

Question 3

What does the case L’ESTRANGE V GRAUCOB say?

Answer 3

Where the parties sign the contract, the parties agree to what they sign for

Question 4

When will an exclusion clause still be binding if a contract isn’t signed?

Answer 4

• if the clause is set out in a contractual document

* if reasonable steps were taken to bring the clause to the attention of the party

Question 5

What does the case CHAPELTON V BARRY UDC say?

Answer 5

An exclusion clause on the reverse of a ticket is not incorporated into the contract

Question 6

What does the case HOLLIER V RAMBLER MOTORS say?

Answer 6

An exclusion clause may be incorporated into the contract on the basis of sufficiently consistent past dealings

Question 7

What is the contra proferentem rule?

Answer 7

Where there is ambiguity in the meaning or scope of an exclusion clause it should be interpreted against the party who seek to rely on it. Very clear words are required to exclude liability in the tort of negligence

Question 8

Which case corresponds with the contra proferentem rule?

Answer 8

HOLLIER V RAMBLER MOTORS

Question 9

What does S.31 CONSUMER RUGHTS ACT 2015 state?

Answer 9

In a contract to supply goods a trader cannot exclude liability for goods not being of satisfactory quality, fit for purpose or as described

Question 10

What does S.57 CONSUMER RIGHTS ACT 2015 state?

Answer 10

In a contract to supply services a trader cannot exclude liability for services not being performed with reasonable care and skill or within a reasonable time

Question 11

What does S.65 CONSUMER RIGHTS ACT 2015 state?

Answer 11

Traders cannot rely on a term incorporated into a consumer contract or notice which excludes liability for death or personal injury caused by the trader’s negligence

Question 12

What does the UNFAIR CONTRACT TERMS ACT 1977 provide?

Answer 12

The main protection against exclusion clauses in business-to-business and consumer-to-consumer contracts by making certain clauses unenforceable and others only enforceable if they satisfy the test for reasonableness

Question 13

What does S.2(1) UNFAIR CONTRACT TERMS ACT 1977 state?

Answer 13

A party cannot rely on an exclusion clause that tries to exclude liability for death or personal injury caused by negligence

Question 14

What does S.2(2) UNFAIR CONTRACT TERMS ACT 2015 state?

Answer 14

A party can only rely on an exclusion clause that tries to exclude their liability for loss or damage if it satisfies the test for reasonableness

Question 15

What does S.3 UNFAIR CONTRACT TERMS ACT 1977 state?

Answer 15

A business can only rely on an exclusion clause in their written standard terms of business if the clause satisfies the test for reasonableness

Question 16

Which section defines the test for reasonableness?

Answer 16

S.11 UNFAIR CONTRACT TERMS ACT 1977

Question 17

What does S.11 UNFAIR CONTRACT TERMS ACT 1977 state?

Answer 17

The party seeking to rely on the exclusion clause must prove that it was fair and reasonable to include it in the contract in the light of the circumstances known to the parties at the time of contracting

Question 18

What does S.1(6) CONTRACTS (RIGHTS IF THIRD PARTIES) ACT 1999 state?

Answer 18

A third party can enforce any term which excludes liability where they are intended to benefit