Exemption clauses

• Exemption clause


  A term in a contract that limits or excludes the liability of one party in case of breach of contract
• Exemption clause


  • Allows a party to avoid liability for breach of contract
  • Requires adequate notice to the other party
• A person who signs a contract is bound by its contents whether or not they have read or understood them
• In Lively v Graucob, a faulty vending machine was sold and the exemption clause was not drawn to the attention of the claimant at the time of making the contract, so it was invalid
• Exemption clauses are common in contracts between parties who have equal bargaining power and can be incorporated as a term of the contract
• Under the Consumer Rights Act, terms in consumer contracts that exclude or limit liability are presumed to be unfair and unenforceable
• Consumer Rights Act


  Aims to enable consumers to make informed choices about contracts and ensure all terms are fair
• The focus of the Consumer Rights Act is to address the imbalance of power between traders and consumers