Exemption clauses

• An exclusion clause is a term of the contract that excludes a party from liability for what would otherwise be a breach of contract
• Limitation clause is a term that simply limits the liability of a party to a specified amount in the event that a term of the contract is breached
• Purpose for exemption clauses - Allocate risk between parties to contract

  Limit the exposure of a party to risks
• Exclusion clauses can be unfair to a party
• Unfair contract terms act 1977
• 3 ways to incorporate an exemption clause into a contract

  By signature

  By notice

  By a consistent and frequent course of dealing
• Legal controls on the use of exemption clauses (Special protection for Consumers)
• The contra proferentem rule - Where there is doubt about the meaning of the contact , the words will be construed against the person who is seeking to rely on them
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  Statutory control unfair contract terms act 1977

  There were gaps in the judicial control mechanism for exemption clauses - essentially the courts don't like exemption clauses
• UCTA 1977

  Introduced to fill these gaps
• General

  Under s.1 (3) the  Act only applies to Business liability - Things done in the course of business or from premises used for the purpose of business
• Protection under the act

  Under S2  clauses that attempt to exempt business liability for death or personal injury are void (not valid or legally binding) However , this doesn’t apply to personal property
• Legal controls on the use of exemption clauses - Special protection for consumers