exemption clause

• Three step approach: Step 1 - Is it a term of the contract / has it been incorporated into the contract?

  Step 2 - Does it cover the breach complained  of?

  Step 3 – Is it unfair?
• •Incorporation of EC by: Signature, notice, previous course of dealings
• signature: L'estrange v Gaucob. It was held that In signing the sales agreement she was bound by all the terms contained in the agreement irrespective of whether she had read it or not
• notice: •To be a term of the contract, the existence of the EC must have been brought to the knowledge or notice of the party against whom it is to be used. case: Olley v Marlborough
• reasonability of the notice is dependent on the nature of document, degree of notice and time of notice.
• nature of document: Jenifer's case: The passenger would not consider a receipt to be a contractual document and would not expect it to contain contract terms. Therefore, the EC was ineffective.
• Sugar v London: Anything that covers the notice will prevent reasonable notice occurring
• time of notice- Olley v Marlborough
• previous course of dealings: Hollier v Rambler Motors where 3 or 4 transactions over the last 5 years is not sufficient to establish a course of dealings.
• Does the clause cover the damage?

  Natural and Ordinary Meaning

  contra proferentum rule (strict meaning)

  Fundamental Breach

  “Four corners Rule”
• use consumer protection act 1991 if the value exceeds RM 50000
• CPA: s24(c) governs customers if the clause has resulted in an unfair advantage to the supplier
• 24D. (1) A contract or a term of a contract is substantively unfair if the contract or the term of the contract

  (a) is in itself harsh;

   (b) is oppressive; 

  (c) is unconscionable;

  (d) excludes or restricts liability for negligence; or 

  (e) excludes or restricts liability for breach of express or implied terms of the contract without adequate justification.