common law controls

• exclusions and limitation clauses

  'freedom of contract' means parties can generally agree to any terms they like but one party to the contract is often in a much stronger position than another. therefore the courts of parliament have found ways of limiting the effectiveness of exclusion clause
• exclusion clause

  a term in a contract that prevents one party being liable for breach
• limitation clause

  a term ina.contract that sets an upper limit on liability for breach
• common law controls (rules on the incorporation of terms)

  if an exclusion clause has not been successfully incorporated as a term into the contract then it will not be effective
• incorporation of terms when the agreement has been signed

  • (L'Estrange v Graucob) - c was bound to the exclusion clause even though she had not read the contract
  • (Grogan v Robin Meredith) - this will not apply if it is not a contractual document
  • (Curtis v Chemical Cleaning) - if verbal statements have been made that contradict the signed document, the term may be construed as the verbal statement suggests, not how it is actually written
  • (Interfoto v Stiletto) - harsh or unusual terms must be given 'sufficient prominence'
• incorporation of terms on notices, signs, tickets etc

  new terms cannot be incorporated after acceptance

  • (Olley v Malborough Court Hotel) - sign was too late to incorporate
  • (Chapleton v Barry) - contract was already made
  • (Parker v SE Railway) - if C knew there were terms on the back of the ticket then he would be bound by them
• incorporation as a result of previous dealings of the parties

  if the parties have dealt on the same terms in the past, it is possible to imply knowledge of the clause from the past dealings, provided there has been consistency

  • (McCutcheon v David) - no consistency so not incorporated
• the contra proferentem rule

  if there is doubt in the meaning of a term, it will be constued against the person who put it in the contract - (Transocean Drilling UK)
• the effect of exclusion clause on third party contracts

  privity usually prevents a third party from relying on terms of a contract, so an exclusion clause might not offer protection to third parties - (Scruttons v Midland Silicones)
• attempts to excluse all liability for negligence

  courts will prevent d excluding liability for negligence wherever possible, especially where d has been vague and appears to try to prevent any liability for 'any loss' without being sufficiently specific as to their cause - (Shell v P&O Road Tanks)