limitation clause
a term in the contract where one party limits its liability to the other party.
exclusion clause
a term in the contract where ne party excludes itself from the entire liability to the other party.
limitation & exclusion clauses 3 criterias
it must be incorporated within the contract
it must be clear
it must not be rendered ineffective by statute (legal)
INCORPORATION
- In order for a term to be incorporated in the contract (form part of it), the party to be bound by it must have sufficient ______of it.
-Two factors are crucial to the issue of notice:
notice
timing and sufficiency
Timing: The term excluding liability must be notified to the other party _____to that
party’s acceptance.
prior
Note: that a party may be deemed to have ___________from past contractual dealings
implied notice
consumer agreement between business & consumer must …
ALWAYS tell them about d notice before acceptance. (ALWAYSSSSSSS)
Non-consumer agreement between businesses
can hv implied notice
Sufficiency: Generally a clause will not be binding unless the offeror has taken reason
able steps to draw it to the customer’s ______
attention
-this rule does not cover signed documents (the customer has d responsibility to READ)
An exclusion clause is not effective if it is _______. Where its wording is unclear, the court may apply the contra proferentem rule to restrict the effects of an exclusion clause.
ambiguous
contra proferentem- side with the party who DIDNT make d contract.
Where a breach of contract is so serious that it defeats the whole purpose of the contract, the courts may still be prepared to allow an exclusion clause to protect the party in breach.
fundamental breach
-snowstoms will delay flights
for business liability to customers (seeks to limit or exclude liability inccured)
excludes: real estate & insurance
unfair contract terms act (ucta)
