Exclusion and Limited Clauses Evaluation

• Problems With Common Law Rules On Notice For Incorporation Of Exclusion Clauses

  • can be justified in limiting freedom of contract to strive for fairness; Olley v Marlborough Hotel
  • ensuring terms are properly incorporated and any harsh terms are brought to attention , discourages underhand dealings and encourages openness; Thompson v London Railway
  • must be aware before or during time of contract
  • different view, Thompson could not read, still incorporated as it was on a notice on the wall; Spurling v Bradshaw
  • unfair to weaker party - exclusion clause incorporated due to previous dealings, not included in current agreement; Hollier v Rambler Motors
• Imbalance of Power

  • when parties are unequal, can create injustice; Graucob v L'Estrange
  • consumers have to accept to get certain deals for goods, even if not understood; Grogan v Robin Meredith Plant Hire
  • signed even when not read, contractual document
  • must be no misrepresentation; Curtis v Chemical Cleaning and Dying Co.
  • unsigned - prove incorporation, make sure other party was given notice before or at time of contract
• Problems With Contra Proferentum Rule of Interpreting Exclusion Clauses

  • considered fair where both parties have equal bargaining power
  • where there is doubt about the meaning of a tern, words will be construed against person who put it in
  • encourage clarity of contract drafting
  • used when exclusion clause favours one party and is ambiguous/vague
  • fair clause - equal and beneficial; Transocean Drilling UK Ltd v Providence Resources
• Statutory Rules Limiting Exclusion Clauses in Non-Consumer Contracts

  • Unfair Contract Terms Act 1977
  • harsh statutory controls (business to business), s.11 - test for reasonableness
  • s.11 (4) - sellers expected to get insurance
  • only fair that person who inserts exclusion clause must show it was reasonable
• Statutory Rules Limiting Exclusion Clauses in Consumer Contracts

  • Parliament has imposed extensive statutory controls to protect rights of consumers
  • Consumer Rights Act 2015
  • promote fairness - don't put C at a disadvantage, plain intelligible, brought to consumers attention
  • s.31 - limits exclusion clauses on implied conditions
  • s.65 - no exclusion for death or personal injury - encourage high safety standards