Contract- lecture 15a- Exclusion clauses Fundamentally a term in a contract- Any term in a contract restricting, excluding or modifying a remedy or a liability arising out of a breach of a contractual obligation' time stipulation beyond the liability is excluded Reasons for exclusion of contract- freedom of contract can agree on any terms vs protecting the weaker party so may be more in favour of a particular party. How have courts developed more control · 19th/20th Century - Common Law techniques 'incorporation' 'interpretation/construction' wording of clause ‘fundamental breach' • 1970s onwards - statutory control - - Unfair Contract Terms Act (UCTA)1977 - Consumer Rights Act 2015 Incorporation Was the clause part of the contract- have to be sure Party needs reasonable notice · Interfoto Picture Library v Stiletto Visual programmes (1988). Ordered product, came with delivery note, anyone who held them for over a certain day had to charge. Fee in one case was over £3,000 and wouldn't pay it, argued they knew about it. Issue they had sufficient notice held not brought to attention enough to pay, c couldn't get the money. Tests of incorporation 1) Signature -generally conclusive - L'Estrange v Graucob (1934) - didn't read documentation, still bound as they signed -unless induced by false statement - Curtis v Chemical Cleaning and Dyeing Co (1951) woman got form and asked what it was about, told they had no responsibility for beads and trimmings of her wedding dressed when washed, she agreed. It came back with a stain which she wasn't told about so they misrep the extent of exclusion. Company had to pay for the stain themselves. 2) Timing -Olley v Marlborough Court Hotel (1949) -Thornton v Shoe Lane Parking (1971) 3) Previous course of dealing -Hardwick Game Farm v Suffolk AA (1969) farmer ordered feed for 3 years, delivery note had terms, was bound as he had frequently purchased
- Hollier v Rambler Motors (1972) not frequent course of dealing 4) Nature of the document -Chapelton v Barry UDC (1940) deck chair ticket had terms and conditions 5) Reasonable notice - steps taken to draw the attention of the other party - Parker v South Eastern Railway (1877) -Thompson v LMS Railway (1930) c couldn't read, immaterial that je couldn't read, focused more on what was in the terms. 6) Nature of the clause (onerous) -Spurling v Bradshaw (1956) - 'red hand' test- Per Lord Denning- 'Some exclusion clauses I have seen would need to be printed in red ink on the face of the document with a red hand pointing to it before the notice could be held to be sufficient' - needs more prominence - Thornton v Shoe Lane Parking (1971) Interpretation/construction . When it is determined that a clause has been incorporated into a contract, the next issue is whether the clause covers the breach that has occurred. . The wording of the clause must be examined to determine if it applies to the particular situation in question. · 'Contra proferentem' rule