Terms and Exclusion Clauses

• Express Terms


  Oral Statements
• Deciding whether a pre-contractual oral statement is a representation or a term


  1. Consider the intention of the parties

  2. If the representor possesses superior knowledge and skill, more likely a term

  3. If the consumer is in a position to verify the truth of a statement, more likely a representation

  4. If there is a short time between the making of the statement and the entering into of the contract, more likely a term
• Cases on pre-contractual oral statements


  • Bannerman v White (1861)
  • Dick Bentley Productions v Harold Smith (Motors) (1965)
  • Oscar Chess v Williams (1957)
  • Routledge v McKay (1954)
• Implied Terms


  Terms which have not been mentioned by either party but are nonetheless included in the contract
• Implied terms


  • Need to be considered
  • Courts will imply a term only if it is needed for business efficacy (Marks and Spencer v BNP Paribas (2015))
  • Officious bystander test (Shirlaw v Southern Foundries (1939))
  • Business efficacy test (The Moorcock (1889))
• Types of implied terms


  • Terms implied by fact
  • Terms implied by statute
• The Consumer Rights Act 2015 protects consumers against unfair terms, prevents companies excluding liability for negligence, and implies certain terms into consumer contracts
• Terms implied into consumer contracts by the Consumer Rights Act 2015


  • Goods are of satisfactory quality (section 9)
  • Goods are fit for purpose (section 10)
  • Services are to be carried out with reasonable care and skill (section 49)
  • Services are to be carried out within a reasonable time (section 52)
• Exclusion Clauses


  Clauses that attempt to exclude or limit a party's liability
• Common law controls on exclusion clauses


  1. Examine whether the clause has been validly incorporated (by signature, reasonable notice, or through previous dealing)

  2. If signed, C is bound even if did not read or understand (L'Estrange v Graucob)

  3. Reasonable notice required if no signature (Parker v South Eastern Railway, Olley v Marlborough, Chapelton v Barry, Spurling v Bradshaw)
• Statutory controls on exclusion clauses


  • Unfair Contract Terms Act 1977 (UCTA 1977)
  • Consumer Rights Act 2015 (CRA 2015)
• UCTA 1977


  • Businesses cannot exclude or restrict liability for death or personal injury resulting from negligence (section 2(1))
  • Terms subject to a reasonableness test (section 11)
• CRA 2015


  • Requires all consumer contract terms and notices to be fair and transparent (section 62)
  • Prohibits exclusion or restriction of liability for death or serious injury resulting from negligence (section 65)