Contract Law -> Exemption and Exclusion Clauses

Question 1

Define exemption and Exclusion Clauses

Answer 1

Any term in a contract that limits the liability or remedy. You must give the other party adequate time to consider this term.

Question 2

Define the contra proferentem rule

Answer 2

If there is any doubt about the meaning of the contract, the words will be used against the person who constructed them.

Question 3

Case law for contra proferentem rule

Answer 3

Houghton v Trafalgar Insurance LTD [1954]

Question 4

UTCA 1997 relevance

Answer 4

Applies to business liability and provides a “test of reasonableness”

Question 5

What is the test of reasonableness as outlined in UTCA 1997

Answer 5

• Contract term reasonableness:
  A term is considered reasonable if it was “fair and reasonable” to include it. Taking into account the circumstances that were known by both parties when the contract was formed
• Notice reasonableness:
  A notice should be fair and reasonable to allow reliance on it
• Restricting Liability:
  Must consider the resources available to meet liability
  The extent to which the party could cover themselves with insurance

Question 6

Case law for business liability

Answer 6

Photo Production LTD v Securicor [1980]