Exclusion and limitation clauses

what is it?

a term/clause in a contract which purports to exclude abilities which may lead to a breach of contract

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What is a limitation clause?

something which restricts that ability

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What is its purpose?

to put the risk on the party who can best bear that risk

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Photo production v securical

security guard service for customer, rather than making it safe, he set fire to the building. Exclusion clause in contract for wrongdoing of employees. HoL upheld decision. In breach of contract but not at fault (employeers fault) customer owed insur

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insurance to guard against risk. If they couldnt exclude this liability they would need their own insurance against employees actions- expensive as they don't know what theyd be insuring against

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What is the principle on exclusion clauses?

If parties want to include an exclusion clause, that it up to them, the court is there to uphold it

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But what happens in practise?

there are statutory provision on exclusion clauses, but the courts themselves have interfered and developed regulation on the use of exclusion clauses

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What are the common law controls?

Less straight forward than statutory controls (in statutes you just apply it). in common law we look at what different judges have said in cases, which will differ, so these controls are much vaguer.

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What makes an exclusion clause valid (in common law controls)

For an exclusion clause to be valid it must be a term of a contract, almost always an express term. The liability arises because of what the parties have agreed- can only be excluded if the parties have agreed

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What happens in Chalepton v Barry UDC?

hired a deck chair which collapsed, Chalepton sued for breach of contract, however there was an exclusion clause on the receipt that said he could not sue if he was injured. Court said it wasn't a term because he hadn't seen this term on the receipt,

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nor expected for it to have an exclusion clause, because it is a receipt, therefore is given after the contract has been made

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L'Estrange v Graucob

wanted a cigarrette machine for her shop, when she agrees she signs a document agreement but doesn't bother to read it. Machine is defective, she brings a claim, company say that they are not liable since there was an exclusion clause. She said that

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she hadn't read the documents, however the court held that she signed the document, therefore agreed with what it contained, so she could not claim

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What if it is an unsigned document?

Interfoto Picture Library Ltd v Stiletto Visual programmes Ltd- had a clause within unsigned document which wasn't upheld. The best way for supplier to ensure agreement is to get them to sign

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What happened in Olley v Marlborough Court Thornton v Shoe Lane Parking?

Couple were in a hotel and had something stolen, there was a notice in rooms saying the hotel is not liable for items stolen. However, when they entered into contract they hadn't been into the room, therefore wouldn't have seen the clause, so hotel c

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couldn't argue that they had agreed to this term

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Was there a consistent course of dealing? Spurling v Bradshaw

contract for the sale of barrels of orange juice, when he goes to collect orange juice, the barrels have been damaged and the juice is gone. The claimant received terms of conditions late, after signing contract, but court held that because they had

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regular dealings and the contract was often sent a few days later, the clause as valid.

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Was there a recognised trade practise? British Crane Hire Corporation Ltd v Ipswich Plant Hire Ltd

Ipswich urgently need a crane, hire one, corporation send over conditions after crane has already arrived and the crane had already sunk into sand, so Ipswich said they were not paying since the clause came too late, even though this was the first ti

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time they had used this company, the clause was incorporated, since they were in the same business of hiring and selling equipment, therefore they used the same terms and conditions.

Ipswich didn't know this, however they would have known that their terms and conditions would have been similar and were agreeing to be bound by usual terms and conditions

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COMMON LAW CONTROLS: CONSTRUCTION

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Andrews and Singer

sale of car, described as new but had 550 miles on clock. Buyer sought to reject car, but contract said that conditions, warranties and liabilities implied by statute, common law, or otherwise are excluded. But the court disagreed, since express term

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is breached, as well as statute law e.g. sale of goods act (goods must match their description)

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Can an exclusion exclude negligence?

A contract can exclude liability for a breach, but exclusion doesn't exclude negligence

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What does White v John Warwick & co Ltd [1953] show?

an injury was suffered after a tricycle was faulty, if it had been fit for purpose there wouldn't have been injury, it breached term that D would take reasonable care when supplying the bicycle. Supplier breached two separate terms, saying wasn't lia

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liable if bike was unfit, wasn't liable for his negligence. Courts have the Q of does the clause use the word 'negligence', they didn't. By saying no liability, the clause could apply to negligence, but also strict liability.

The court said that this clause doesn't exclude liability for personal injury arising from negligence

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Alderslade v Hendon Laundry [1945]

hanckerchiefs were to be laundered, went lost, D claimed he only had to pay part of value under contract, V wanted all full comensation.

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What is step one? Does it expressly cover negligence? Step two- could it cover negligence? Step three- is there any other liability?

In this case, no, since there was no other obligation than to take reasonable care. So Courts said exclusion clause, even though not expressly referring to negligence does cover it, since its the only liability arrising, without it it would be meani

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What does Hollier and Ramble Motors show?

Car at garage, destroyed by fire while there, must garage compensate customer? G say no, bc clause saying they aren't liable for damage caused by fire. but by applying principles, only basis on which a fire could be caused is if D were negligent. G s

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said that they could not promise car's safe return, only to take good care of it. CA found that clause is not meaningless, serves as a warning to customers, customers must insure car, bc if it is damaged, garage arent liable

Why is this different? Hollier v Ramble is more recent, customer is a consumer dealing with a business, hre courts are more protective of customer and will apply principle more rigorously. SO businesses should use word negligence if hoping to fall un

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under principles

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i am confused this lecturer is not helpful

at all

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STATUTORY CONTROLS

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What are relevant statutes?

Sale of Goods Act 1979, Supply of Goods & Services Act 1982, Unfair Contract Terms Act 1977

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Unfair Contract Terms Act 1977

Contract between 2 business, clause satisfies common law controls, covers liability that arises, no misrepresentation and not seeking to exclude suppliers liability for fraud

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i really am very confused ur gonna have to learn this topic somewhere else

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Exclusion and limitation clauses

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