SEM 2, LECT 4 - EXCLUSION CLAUSES - CONTRACT, 28/01/20 Definition - 'Any term in a contract restricting, excluding or modifying a remedy or a liability arising out of a breach of a contractual obligation' Examples - 'The company shall not be liable for any loss or damage, how so ever caused' - 'The company will be liable up to a maximum of £500 in relation to any claim' - (limitation clause) - 'All claims for breach of contract must be notified to the company within seven days of the alleged breach occurring' Rationale for Control - 'Freedom of contract' versus 'protecting the weaker party' - 'Risk planning' versus 'standard form contracts' Development of Control - 19th/20th Century - Common Law techniques 'incorporation' o 'interpretation/construction' o ‘fundamental breach? - 1970s onwards - statutory control - o Unfair Contract Terms Act (UCTA) 1977 Consumer Rights Act 2015 Common Law - Incorporation - The question is (as is applicable to all 'terms' generally) 'was the clause part of the contract'? Cf Interfoto Picture Library v Stiletto Visual programmes (1988). o Claimants had photographic transparencies and defendants wanted to use 47 of them, which came along with a delivery note with terms and conditions - whoever held transparencies over 14 days would be liable for paying a fee. Defendants held on for 21 days, gathered up a large fee, and refused to pay it. Courts held that the defendants were not sufficiently noted of the consequences. - A clause cannot be effective to exclude liability if it is not part of the contract. - The rules are based on the principle that a party must have had reasonable notice of an exclusion clause at the time of the contract for it to be effective. Tests of Incorp 1. Signature -generally conclusive - L'Estrange v Graucob (1934)
-unless induced by false statement - Curtis v Chemical Cleaning and Dyeing Co (1951) - Claimant took wedding dress to laundry and was told to sign a form. She asked what the form concerned, and the employee told her that it means that the laundry company didn't take p=liability for certain issues, she signed it. Upon collection, the dress had a stain on it, but this was not contained in the exclusion clause. Employee misrepresented extent of exclusion - they had to pay for the stain as she wasn't bound by it. 2. Timing -Olley v Marlborough Court Hotel (1949) - Hotel contract made in room/lobby -Thornton v Shoe Lane Parking (1971) 3. Previous course of dealing -Hardwick Game Farm v Suffolk AA (1969) - Farmer and feed - Hollier v Rambler Motors (1972) - Transaction of 3-4 times over 5 years does not amount to previous course of dealing, has to be consistent. 4. Nature of the document -Chapelton v Barry UDC (1940) - terms and conditions on a ticket 5. Reasonable notice - steps taken to draw the attention of the other party - Parker v South Eastern Railway (1877) - 'see back' -Thompson v