Exclusion Clauses: Common Law Controls

• Courts only allow exclusion clauses to become part of the contract if they are properly incorporated

  • There are three ways to incorporate the exclusion clause
• 1. Whether the agreement was signed

  • When a party has signed an agreement/contract, they are bound by it - L'Estrange v Graucob
  • If a query is made before signing or if there is a request for clarification, then the oral statement can override the written statement - Curtis v Chemical Cleaning
• 2. Incorporation by notice

  • Give notice to the other party about the existence of the exclusion clause beforehand - Thornton v Shoe Lane Parking
  • Harsh terms must be brought to the attention of the other party - Kaye v Nu Skin
  • Terms cannot be incorporated after acceptance unless: There is a new contract which varies the original, it is specified in the original contract that there can be a variation in terms - Olley v Marlborough Court Hotel
  • Tickets may incorporate terms if it is reasonable that the back of the ticket will be checked for terms - Chappleton v Barry Urban DC
• 3. Incorporated by previous dealings between parties

  • Terms can be incorporated if the parties have past dealings with each other, providing these are consistent - McCutcheon v David MacBrayne
  • Courts are reluctant to incorporate terms into a contract
• Contra Proferentem Rule

  • Applies when an exclusion or limitation clause is unclear
  • When words are ambiguous, the court will decide if D can rely on the term - White v John Warwick
  • The words must be interpreted against the person who is trying to rely and use the term