construction of terms, exclusion clauses and unfair contract terms - w6 Flashcards
(8 cards)
construction of terms
general principles
general principles
11.130 - 11.180
process of construction - determing what the terms mean to ascertain rights and obligations of parties, gives effect to intention of parties
objective approach to construction
- pacific carriers v bnp paribas 11.150
document construed as a whole 11.170
- royal botanic gardens and domain trust v south sydney city council
giving words their natural and ordinary meaning
- darlington futures ltd v delco australian pty ltd 11.190
construction of terms
construction and the commercial prupose of contracts
general principles
how a reasonable businessperson (placed in the position of the parties) would
have understood the terms of a commercial contract
- electricity generation corp v woodside energy 11.220
court considered, language used, surrounding circumstances known to parties, and commercial purpose and objectives (see 6 dot points listed there)
can consider contract alone or events external to the contract
- mount bruce mining v wright prospecting 11.240
application of principles to construe ambiguous term in a lease agreement on
payment of rates and taxes
- ecosse property holdings v gee dee nominees 1.260
construction of terms
par and ‘the true rule’
parol evidence rule
- the parol evidence rule applies to identifying terms and the construction of terms (chapter 10 - express terms and 11 - implied terms)
- the rule prevents the admissibility of extrinsic evidence to explain the
meaning of the term
the “true rule” is endorsed in:
- royal botanic gardens and domain trust v south sydney city council 2002 11.80
- western export services v jireh 2011
- mount bruce mining v wright prospecting 2015
compare with the english position:
- investors compensation scheme (ics) 1998
- chartbrook v persimmon homes 2009 – “… it was not necessary to find an “ambiguity” before one could have any regard to background”
- exceptions to the parol evidence rule – to resolve ambiguities, prove custom or usage, rectification
exclusions clauses, and unfair contrat terms
exclusion clauses, limitation clauses
exclusions clauses
13.20 - 10.120
clauses that purport to exclude, modify or limit a liability, duty or remedy
exclusion clause: the car is “garaged at the owner’s risk will not be responsible for loss or damage of any description”
limitation clause: “any liability on (the company’s part)… for damages for or in respect of any claim arising out of … the relationship established by this agreement … shall not in any event … exceed one hundred dollars”
A party that wishes to rely on an exclusion clause must prove:
- the exclusion clause was incorporated into the contract; and
- the clause covers the liability that has arisen
exclusions clauses, and unfair contrat terms
general principles
exclusions clauses
should exclusion clauses be construes more strictly than limitation clauses?
the objective approach: a clause will be given its ‘natural and ordinary meaning’
- darlington futures ltd v delco australia pty ltd 12.50
contra proferentem rule: an ambiguous clause will be construed against the ‘proferens’, that is, the party who ‘proferred’ (put forward) the clause for the other party to sign
- eimco corporation v tutt bryant lts 12.80
exclusions clauses, and unfair contrat terms
specific principles
exclusions clauses
the ‘four corners’ rule
- the council of the city of sydney v west 12.80
deviation rule 12.100
- thomas national transport (melbourne) pty ltd v may & baker (australia) pty ltd
exclusion from negligence
- canada steamship rules 12.130
- davis v pearce parking station pty ltd 12.120, the word ‘negligence’ is not used, but can still be effective to cover negligence
consaumer guarantees can’t be excluded
s64 acl
exclusions clauses, and unfair contrat terms
substantive unfairness and procedural unfairness
unfair contract terms (as defined by legislation)
12.150 - 10.450
substantive unfairness concerns the terms of the contract
- e.g. of substantive unfairness – extremely high prices, onerous and harsh terms, exclusion clause
- the uclt in the acl deals with substantive unfairness (although procedural concerns are also addressed)
procedural unfairness concerns the way the contract is entered into
- e.g. of procedural unfairness – contract entered into by vitiating factors including undue influence, coercion etc
- part iii on avoidance - vitiation factors
uctl = unfair contract term law
exclusions clauses, and unfair contrat terms
what is the test of unfairness
unfair contract terms (as defined by legislation)
s24: it is a standard form consumer contract, hinges on three key elements:
it is considered to be an unfair contract if:
- it would cause a significant imbalance in the parties’ rights and obligatiosn
- it is not reasonably necessary to protect the legitimate interests of the party who benefits from the term
- if could cause detriment to a party if applied
refer to s23 & 250 for effect of an unfair contract term
examples of unfair contract terms 12.330
