Exclusion and Limitation Clauses Flashcards
Define an Exclusion Clause
Yates, 1982 p.1 defines an exclusion clause: “A clause in a contract or notice which appears to exclude a liability or legal duty which would otherwise arise”
Define a Limitation Clause
A limitation clause is that which accepts liability but seeks to limit the amount payable, e.g. dry cleaners limiting the damages to £50.
What is the leading case in Exclusion clauses?
L’Estrange v Graucob (1934) (the rule in…)
The rule in L’Estrange v Graucob (1934)
Give the four conditions arising from the case
The most basic rule concerning exclusion clauses is known as the rule in L’Estrange v Graucob Ltd (1934). This states that if a written contract is signed by both parties then:
a) Both parties are bound by all of the clauses in the contract
b) This includes any exclusion clause
c) It is irrelevant that the parties have not read the contract
d) It is also irrelevant that they have not understood the clauses in the contract
Oral Contracts / Tickets Contracts
What are the rules exclusion clauses in these contracts?
The existence of the exclusion clause must be brought to the attention of the other party before they agree to the contract.
The clause must be reasonably visible to the human eye.
Oral Contracts / Tickets Contracts
Made aware before contract: give the case law
Made aware before contract:
Olley v Marlborough Court Hotel (1949)
Thornton v Shoe Lane Parking Ltd (1971)
Oral contract / Tickets Contracts
Must be reasonably visible to the human eye: give the Case Law
Visibility:
Chapelton v Barry Urban District Council (1940)
Parker v South Eastern Railway (1877)
Statutory Controls on exclusion clauses
What is UCTA?
Unfair Contract Terms Act 1977.
Statutory Controls on exclusion clauses
Give the three relevant sections of UCTA
UCTA s.2 - Any attempt to exclude liability for personal injury or death is void.
UCTA s.12 - Any attempt to exclude liability for consumer protection is void
UCTA s.11 - All limitation clauses must be reasonable (see George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd (1982).
EU Intervention
Name the relevant directive and it’s effect
As per EU Directive 13 / 93 - in consumer contracts where the wording is vague, then the clause will be interpreted in favour of the consumer.
Previous Course of Dealing
The rules on ‘Implying’ an exclusion clause
The course of dealing must be regular and consistent.
Consistent dealing will imply exclusion clauses.
If both parties are experienced business persons in the same trade which uses stock exclusion clauses, then the position may be different.
Previous Course of Dealing
Give the case law re: previous dealing Regular and Consistent
The course of dealing must be regular and consistent;
McCutcheon v David MacBrayne Ltd (1964) [consistent]
Hollier v Rambler Motors Ltd (1972) [inconsistent]
Previous Course of Dealing
Give the leading case supporting consistent dealing
Consistent dealing will imply exclusion clauses:
Henry Kendall Ltd v William Lillico Ltd (1969)
Previous Course of Dealing:
Give the leading case if both parties are experienced / commercial
If both parties are experienced or commercials entities dealing in industry standard exclusion clauses:
British Crane Hire Corporation Ltd v Ipswich Plant Hire Ltd (1973).
