LAW P3 CONTRACT (Exclusion clauses)

Question 1

What are exclusion clauses??

Answer 1

Exclusion clauses seek to exclude or limit liability under the contract.

Question 2

What are the two ways courts regulate exclusion clauses?

Answer 2

The courts have found 2 ways to regulate exclusion clauses:

• Has the clause been incorporated into the contract
• Does the clause cover the alleged breach

Question 3

What are the cases for the point ‘does the clause cover the alleged breach?’

Answer 3

• Goodlife foods v Hall fire protection, an exclusion clause can cover the alleged breach if it is clearly worded and brought to the attention of the other party
• Hollier v Rambler motors, a clause excluding liability must be clearly worded and expressly cover the offence if it is to be relied upon

Question 4

What are the ways of incorporation?

Answer 4

• By signature – if a document is signed at the time of making the contract, its contents become terms of that contract, regardless of whether they have been read and understood
• By reasonable notice – if separate written terms are presented, those terms only become part of the contract if it can be said that the recipient had reasonable notice of them
• Previous course of dealing – if 2 parties have previously made a series of contracts between them, and those contracts contained an exemption clause, that clause may also apply to a subsequent transaction, even if the usual steps to incorporate the clause had not been taken

Question 5

What are the cases for the different methods of incorporation?

Answer 5

• (signature) L’Estrange v Graucob, in signing the contract the claimant consented to be bound by its contents
• (reasonable notice) Olley v Marlborough court hotel, the exclusion clause had not been successfully incorporated into the contract.
• (previous course of dealing) Spurling v Bradshaw, exemption clauses will operate to protect a party only where he is carrying out his contract.

Question 6

What is the unfair contract terms act 1977?

Answer 6

unfair contract terms act 1977 – This is an act which imposes limitations on exemption clauses and controls the use of clauses excluding or limiting liability for breach of a contract where one of the parties is a consumer.

Question 7

What is the case for UCTA 1977?

Answer 7

Goodlife foods ltd v hall fire protection ltd, an exclusion clause can be upheld under UCTA in a business to business context if it is reasonable