Exclusion Clauses Flashcards
What is an exclusion clause?
It is a clause which seeks to exclude from liability one party for a breach of contract, or even tort.
When can they operate legitimately?
When both parties are of equal bargaining power.
What are the two rules to determine whether to accept a clause’s operation or deny it: 1
The clause must be incorporated into the contract as part of the contract.
What are the two rules to determine whether to accept a clause’s operation or deny it: 2
The clause will be constructed by the courts and must protect the party from damage caused and not seek to gain an undue advantage from it.
How is an exclusion clause included in the contract?
By signature or if other party had knowledge of the clause.
What happens where the parties sign the contract?
maxim caveat emptor applies - you agree to what you sign for - L’Estrange v Graucob
What does maxim caveat emptor mean?
Let the buyer beware
What happens when a contract is not signed, but should have been brought to the other party’s knowledge.
Exclusion clause only be binding if parties had express knowledge of it at time of contract - Olley v Marlborough Court Hotel
Is a clause on the reverse of a receipt sufficient?
Generally not. Chapelton v Barry
General rules for knowledge of the exclusion clause to be enforced are? 1
Did the party have knowledge of the claims?
General rules for knowledge of the exclusion clause to be enforced are? 2
Were reasonable steps taken to bring the exclusion clause to the attention of the party
How must the exclusion clause be interpreted by courts?
It must be interpreted to see if it will achieve what it is meant to do without unduly penalising the other party.
What does contra proferentem mean
against the party which proposed the clause
How is ambiguity interpreted?
Against the party (contra proferentem) who proposed the clause.
When does the clause require very clear language?
Where the clause is held to be valid in situations where the claimant alleges negligence.
