Exclusion clauses

Exclusion clauses

1. To successfully rely on an exclusion clause must show

   • Term incorporated as a term of the contract
   • Wording of clause covers the loss
   • Clause complies with statutory contols

2. UCTA 1977 - B2B Contracts

3. CRA 2015 - Consumer contracts

4. A term of the contract?

   • 1.Signature
     • L'Estrange v Graucob 1934 - C (owner of cafe) bought cigarette machine on terms "Sales Agreement" - signed agreement w/out readin terms SHE WAS BOUND BY AGREEMENT
   • 2.Notice
     • Contract not signed but has been read then have contractual notice of terms (reasonable steps taken)
       • Time notice was given - Olley v Marlborough Court 1949 - Exemption clause only becomes term of contract if brought to attention before or at time of contracting
     • Nature of document - Chapelton v Barry District Council 1940 - will not have notice if doc was not intended to have contractual force
     • Degree of notice - Parker v South Eastern Railway - whether defendant's had been given reasonable notice of clause irrespective of whether they read it
     • Onerousness of clause - Thornton v Shoe Lane Parking 1971 - held, person parking car would expect to find term excluding liability for loss or damage to car but not personal injury so would have to draw special attention to this
   • 3.Previous course of dealing
     • Spurling J v Bradshaw 1956 - D previously dealt w/C warehouseman. 8 barrels of orange delivered for storage. Clause exempted from loss of damage occassioned by negligence. D found barrels empty and was sued for not paying. Exemption clause used as defence - counterclaimed for negligence. D had previously recieved acknowledgement and exclusion clause was binding.

5. CONSTRUCTION OF EXEMPTION CLAUSES

   • 1. Contra Proferentem Rule "construed against person seeking to rely on it" and "any ambiguity is interpreted in manner least favourable to person relying on clause"
     • Andrews Bros v Singer & Co 1934 - Contract for sale of "new Singer cars" contained clause exempting all conditions, warranties and liabilities, implied by statute, common law or otherwise" were excluded as they did not include exclusion of EXPRESS TERMS
   • 2. Negligence
     • Alderslade v Hendon Laundry - law imposes not only duty of care but also some form of strict liability (w/out fault/proof of negligence) - Unless clause covers both types of liability, the person relying on clause is excluded only from strict liability - only relieve them of strict liability by virtue of their calling only
       • White v John Warwick & Co - C hired a bike from D and when riding, saddle tipped forward. Contract stated "nothing in agreement renders owners liable for any personal injury" but term was ambiguous and clause only excluded liability for breach of contract and not in tort of negligence
   • 3. Seriousness of breach - court reluctant to allow party to rely on exclusion clause of fundamental breach
     • Photo Productions v Securior Transport 1980 - Agent started fire in C company deliberately to stay warm - CoA held fundamental breach rule but HoL allowed appeal because of construction of contract that the exclusion clause covered all breaches of agreement
   • COMMON LAW REASONS FOR FAILURE
     • Misrepresentation
       • Curtis v Chemical Cleaning & Dying Co - Claimant induced into signing document by being told there is an exclusion clause excluding damage to beads and sequins on dress,. D returned dress badly stained and could not rely on exemption clause of "any damage howsoever arising"
     • Third Parties
       • Adler v Dickson 1954 - C entered into contract w/shipping co. with exemption clause exluded liability for any injuries to passengers. She decided to sue master and boatsmen - held that they could not rely on clause as they were not party to contract