Types of Terms

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  • Created by: Launston
  • Created on: 14-05-14 11:32
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  • Types of Terms
    • Primary and secondary obligations
      • Exemption, limitation, agreed/liquidated damages, penalty
    • Exclusion Clauses
      • Exclude the liability to pay damages for a breach of contract - can be legitimate or problematic
        • Commercial contracts - used to define the limits of each party's liability
          • Consumer contracts - not necessarily inappropriate but contained in seller's terms and may not be understood
      • Common law controls
        • Concern that exclusion clauses were unfair to buyers BUT judges cannot strike down unfair terms (now statutes exist)
          • Challenging incorporation - Thornton v Shoelane Parking etc.
          • Challenging wording - does exclusion cover the breach?
            • Contra proferentum rule
              • Ambiguities construed against person seeking to rely on clause
                • Andrews Bros v Singer
        • Fundamental breach
          • Rule of law - if breach is fundamental, exclusion clause cannot be relied upon
          • Rule of construction - whether clause covers breach is matter of interpretation
      • Attempts to exclude liability for negligence
        • Standards of performance
          • Strict liability: must perform exactly to agreed terms
          • Negligence liability: reasonable care and skill
        • Canada Steamship v The King
          • Hostility to excluding liability for negligence unless express language
            • Wide enough to cover negligence, but not so wide as to cover other types of liability
    • Legislating against unfair terms
      • UCTA 1977
        • Only applies to exemption clauses
      • UTCC 1993


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