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What is the purpose of an exclusion clause?
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Contract exclusion c
Contract Ireland exclusion clauses
| Question | Answer |
|---|---|
| What is the purpose of an exclusion clause? | 1) To limit the duties of one party and limit the remedies for the other party when there is a breach 2) put cap on damage 3) allocate risk |
| What is an exclusion clause? | Exclusion clause – limit duties of one party -absolve person who relies on it of all liability in event of breach of contract or commission of a tort; |
| What is a limitation clause? | Limitation clause- restrict remedies available to one party in event of a breach e.g. cap on damage or claim within time limit |
| What are the 5 questions to be asked about an exclusion clause? | 1) incorporated in contract? 2) worded to cover breach? Contra proferentum 3) affected by statute? 4) cover negligence? 5) Cover fundamental breach? |
| What are the 3 ways an exclusion clause can be incorporated into a contract? | 1) By signature 2) by previous course of dealing 3) by Notice |
| What is the main case regarding incorporation of an exclusion clause by signature? | L’Estrange v. Graucob [1934] |
| What was the point in L’Estrange v. Graucob [1934] | Once a contract has been signed any exclusion clause is enforceable - even if in the SMALL PRINT. |
| When can a signed exclusion clause be overcome? | When verbal assurances have been given alongside the contract Curtis v. Chemical Dying (told "exclusion only relate to buttons- Held can recover for dress) |
| Can an exclusion clause be incorporated by signing an ancillary document such as a credit card receipt or goods receipt? | No these documents are not contracts but mere confirmations that transactions previously agreed have taken place. |
| What are the 2 rules regarding incorporation of exclusion clauses by notice? | 1) Notice must be given at time contract made -not after 2) must reasonable effort to "FAIRLY BRING TO ATTENTION OF CUSTOMER" |
| What was the point in Interfoto Picture Library v Stilletto Visual Programmes? | reasonable efforts needed to “fairly bring exclusion clause to attention” of customer |
| In what case was it held that the MORE ONEROUS OR UNUSUAL an exclusion clause the GREATER THE DUTY to bring it to the attention of the customer? | Western Meats Ltd v National Ice Cream and Cold Storage |
| Although terms can be incorporated due to a PREVIOUS COURSE OF DEALING what condition must be fulfilled before this is allowed? | The terms and dealing must have been CONSISTENT over time otherwise exclusion clause unenforceable Hollier v Rambler Motors terms vary over time exclusion clause unenforceable. |
| Which case illustrates that any notice of an exclusion clause must be before the contract is formed if it is to be valid? | Thornton v Shoe Lane Parking - notice inside car park too late to be incorporated. |
| What case held that an exclusion clause can only be incorporated due to previous course of dealing when terms are CONSISTENT over time? | Hollier v Rambler Motors -series of different and unrelated transactions do not make exclusion clause operative on the back of a receipt |
| In what case is there a 4 part test to establish whether an exclusion clause is incorporated? | Parker v SE Railway |
| What is the 4 part test for inclusion of an exclusion clause as enunciated in Parker v SE Railway? | 1) If knew of term - are bound 2) No notice of term- not bound 3) If written notice - must prove REASONABLE EFFORT BRING ATTENTION 4) If knew written terms existed -bound even if did not read or intend to accept |
| Even if an exemption clause is correctly incorporated it may not cover the event in question - Give an example of a case where this applied? | Walsh v. Jones Lang La Salle Ltd. [2007] floorspace incorrectly stated in spite of "reasonable care taken" in wording of disclaimer -also no custom and practice customers taking responsibility. |
| What was the point in Andrews v. Singer [1934]? | Exclusion clause cannot displace an express clause "all warranties implied by statute or common law excluded" no overide express undertaking that car "new". |
| What is the contra proferentum rule? | An AMBIGUOUS clause excluding liability will be strictly INTERPRETED AGAINST THE INTEREST OF THE PARTY RELYING ON IT (the proferens) -not the other party. |
| What case has a 3 part test for deciding whether an exclusion clause can exempt liability for NEGLIGENCE? | Canada Steamship Lines Ltd. v. The King, [1952] 2 D.L.R. 786 (P.C.). |
| What is the 3 part test in Canada Steamship Lines for deciding whether liability for negligence can be exempted? | 1) Express exemption for negligence effective 2) If not express still effective exepmtion if words broad enough to cover negligence "howsoever caused" 3) Not effective if wording could ambiguously refer to another kind of breach (e.g. contractual breach) |
| What was held in Regan. v. Irish Automobile Club [1990]? | Although negligence not expressly exempted wording BROAD ENOUGH to MEAN NEGLIGENCE "Damage howsoever caused" |
| What was held in Alderslade v. Hendon Laundry [1945] ? | Clause exempting negligence can ONLY refer to negligence but loss of handkerchiefs in laundry could ONLY BE NEGLIGENCE therefore valid limitation clause of damages 20 times value of handcherchiefs. |
| What case established that exclusion clauses which prevent performance at the heart of the contract are void? | Karsales (Harrow) Ltd. v. Wallis [1956] |
| What excptions are there to the rule that exclusions going to the purpose of the contract are void? | 1) Commercial contract where equal bargaining power 2) Bailment Contracts Carriage goods by sea 3) serious defect leading to substantive difference in the contract. |
| What was held in the Irish case of Clayton Love v. B & I Transport [1970] ? | Scampi went bad on way to Liverpool due to negligence of shipowners - Held: fundamental breach going to heart of contract CANNOT CONTRACT OUT OF FUNDAMENTAL BREACH IN IRELAND (but cf Western Meats) |
| What controversy did Western Meats Ltd v National Ice Cream and Cold Storage introduce to whether exemption clauses could apply to fundamental breaches? | Western Meats allowed exclusion clause for fundamental breach where equal bargaining power BUT a) High Court b) obiter c) Clayton Love not analysed - Clayton Love still law in Ireland. |
| Give a case example where a serious defect leading to a substantive difference in a contract nullified an exclusion clause. | Pinnock Bros v. Lewis Peat Ltd. [1923] farmer's cows poisoned by cattlefeed BUT cf. George Mitchell v. Finney Lock Seeds Ltd. [1983] cabbace seeds not good but still delivered [contract performed] - merely qualitative difference may exempted. |
| What are the 3 statutory regulations which may invalidate an exclusion clause? | 1) Sale of Goods Act 1893 2) Sale of Goods and Supply of Services Act 1980 3) EC Unfair Terms in Consumer Contracts) Regs 1995 |
| What is the main proinciple behind the Sale of Goods and Supply of services Act 1980? | Exemption clauses not valid if they exempt from liability where goods differ from the description, quality or sample offered. |
| What defence does a vendor have under the Sale of Goods and Supply of Services Avt 1908? | Must show that the exemption is "fair and reasonable" |
| Under the Sale of Goods and Supply of Services Act 1980 what 5 matters will a Court consider when it is deciding whether an exclusion clause iof "fair and reasonable"? | Consumer 1) Hobson's choice 2) should have known custom and practice 3) Specially adapted for consumer? 4) Unequal bargaining power 5) Term brought to attention |
| What kind of contracts do the Unfair Terms in Consumer Contract Regulations 1995 refer to? | Form contracts only not individualised contracts |
| What duty does the Unfair Terms in Consumer Contracts Regulations 1995 impose? | Duty to act in good faith when there is imbalance between parties rights and obligations. |
| What does the Unfair Terms of Consumer Contract Regulations 1995 allow the courts to do? | To sever an individual term of a contract. |
Created by:
Solomon