Exemption Clauses

Question 1

3 ways to incorporate an exemption clause? One additional requirement?

Answer 1

1. Signature (unless misrep or non est factum)
2. Reasonable steps taken to bring term to C’s notice (the exact steps requiring depending on the term)
3. Regular and consistent course of dealing

The document into which the exclusion clause is incorporated must be CONTRACTUAL - and not merely a receipt, see Chapelton

Question 2

Scope of UCTA?

Answer 2

Both parties enter into the contract in the course of business on one party’s written standard terms.

Explicitly excludes trader-consumer contracts (but may apply to C2C contracts too).

Question 3

3 restrictions on exclusion clauses under UCTA?

Answer 3

1. Cannot exclude liability for negligence resulting in death or personal injury
2. Cannot exclude liability for negligence unless clause is fair and reasonable in all the circumstances which parties ought reasonably to have contemplated at the time of contract (including the resources of the parties and the availability of insurance)
3. Cannot rely on a contractual term to render substantially different performance from that originally promised, or render no performance at all, unless that term is fair and reasonable in all the circumstances

Question 4

Scope of CRA (2 points)? 2 key differences from UCTA?

Answer 4

1. Only contracts between traders (including govt department or public authority) and consumers (i..e acting outside the course of business).
2. Only works one way - trader cannot enforce unfair term against consumer but vice versa ok.

Covers B2C contracts; and applies even if the contract is NOT a standard term

Question 5

3 clauses which are never effective under CRA?

Answer 5

1. Exclusion of liability for negligence resulting in death or personal injury
2. Exclusion of terms implied by statute for sale of goods
3. Exclusion of terms implied by statute for provision of services

Question 6

Test for exclusions which may be effective under the CSA? 3 examples of ineffective exclusions?

Answer 6

Exclusion or limitation clauses must be fair, i.e.

(i) not contrary to good faith
(ii) does not cause a significant imbalance in parties’ rights to consumer’s detriment

Examples of unfair clauses - (i) disproportionate break fees; (ii) price-review clauses after consumer bound or (iii) trader keeps price if consumer cancels.

Question 7

3-step analysis for exclusion clauses?

Answer 7

1. Incorporated?
2. Properly construed, covers the breach?
3. Not unfair under the UCTA (B2B) or CRA (B2C)?

Question 8

When will an exclusion clause by a seller almost invariably be held unreasonable pursuant to the UCTA or now, the CRA?

Answer 8

1. Seller does not in fact usually rely on its own limitation of liability clause
2. Seller could have insured against the loss caused by its negligence