Exemption clauses and unfair contract terms

  • Created by: phoebs.b
  • Created on: 16-04-18 20:32

White v John Warwick & Co Ltd (1953) - a tricycle was hired but it had a defective saddle. This involved both a breach of a strict contractual obligation (to supply a tricycle reasonably fit for the purpose, s9 Supply of Goods and Services 1982) and a failure to take care to ensure that the tricycle was safe (negligence liability).

Grogan v Robin Meredith Plant Hire (1996) - the claimant was an employee of the defendant's, and had signed an employment contract with them. The defendant required that the claimant signed a timesheet, upon which they had printed additional terms, which were intended to incorporate terms by reference. The defendant attempted to assert that these additional terms ought to be binding upon employees, whilst the claimant counter-claimed that as one would not reasonably expect for contractual terms to be found on a timesheet, they ought not to be deemed a binding contractual promise that varied the original employment contract. Auld LJ stated that a timesheet was more appropriately thought of as an administrative document rather than a contractual one, and thus the average reasonable person would not expect that any conditions stated on it are contractual in nature. Timesheets serve as an administrative record of the performance of an already existent obligation by a party. Therefore, despite the fact that the timesheet was a formal document containing the signatures of both parties, the courts ought to have consideration for the circumstances and intentions regarding the document in determining whether it ought to be legally binding. If a contract is made orally and is followed later by a written document, notice on this occasion may be too late. 

L'Estrange v Graucob Ltd (1934) - the claimant agreed to purchase a cigarette vending machine from the defendant for use in her cafe. She signed a form printed on brown paper headed 'Sales Agreement'. The form included a clause in small print providing that: 'any express or implied condition, statement, or warranty, statutory or otherwise not stated herein is hereby excluded'. The vending machine delivered did not work properly. The claimant brought an action for damages for breach of an implied term or warranty that the machine was reasonably fit for the purpose for which it was brought. The defendants denied liability arguing that the clause above excluded all implied conditions and warranties. The claimant counter-argued that she had known nothing of the contents of the form she had signed. In allowing the defendants' appeal, the Divisional Court held that, because the claimant had signed the form, the above clause was incorporated into the contract. 

Peekay Intermark Ltd v Australia & New Zealand Banking Group Ltd (2006) - the claimant alleged a mistake in the selling of an emerging markets investment product. The defendant claimed that whilst there might have been a misrepresentation, by the time the contract was formed, correct information had been proved and incorporated into the contract. It was held that the later correction did not correct the earlier misrepresentation…




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