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Exclusion Clauses (Reasonable notice (an exclusion clause will not be…
Exclusion Clauses
Reasonable notice
an exclusion clause will not be incorporated into a contract unless sufficient notice of the clause is given
Parker v South Eastern Railway Reasonable steps have been taken to bring the clauses to the attention
a notice of the exclusion notice should be clearly visible in something that looks like a contractual document
Chapleton v BarryThe exclusion clause was not incorporated into the contract. A reasonable person would regard the ticket as nothing more than a receipt and would not expect it to contain contractual terms. .
the terms must be communicated before or at the time the contract is made. If afterwards - they will be ineffective
Olley v Marlborough Court Ltd
The notice was ineffective. The contract had already been made by the time the claimant had seen the notice. It did not therefore form part of the contract.**
Thornton v Shoe Lane Parking The machine itself constituted the offer. The acceptance was by putting the money into the machine. The ticket was dispensed after the acceptance took place and therefore the clause was not incorporated into the contract.
Signature
if the document is signed, it will normally bind the person, whether or not he has read the contents
in the absence of fraud/misrepresentation - impossible to deny the contractual character of the document
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if the nature of the document singed has been misrepresented, then the exclusion clause cannot be relied upon even if the contract containing the exclusion clause has been signed.
Curtis v Chemical Cleaning and Dyeing Co The assistant had misrepresented the effect of the clause and therefore could not rely on the clause in the form even though the claimant had signed it.
a term of the contract whereby one party seeks to exclude or restrict a liability or legal duty that would otherwise arise.
traditional approach "laissez faire" - the courts would not interfere with parties' freedom to contract and would allow them to agree to whatever terms they wanted in their contract, including exclusion clauses. Works well when both parties are of equal bargaining power.
Caveat emptor - the principle that the buyer alone is responsible for checking the quality and suitability of goods before a purchase is made.
devices developed by judges to prevent inequality - exclusion clauses, inserted by means of a standard form contract. Contracts of adhesion - take it or leave it basis, with little or no scope for negotiation.
in order to be effective, an exclusion clause must: be incorporated into the contract and cover the actual breach that had occurred.
Previous dealings
between businesses - if businesses have a history of a trade where exclusion clauses have been included, these are likely to be accepted as forming part of subsequent agreements
British Crane Hire Corporation Ltd V Ipswich Plant Hire Ltd
The term relating to risk was not incorporated into the contract as the defendant was unaware of it at the time the contract was made, however, the court implied the term into the contract as both parties were in the business of plant hire and it was known to both that the use of such terms was prevalent in the trade.
unusual and onerous terms may have to be brought "fairly and reasonably" to the attention and should not be hidden in the small print
Interfoto Picture Library v Stiletto Visual Programme
The term was not incorporated into the contract. Where a term is particularly onerous the person seeking to rely on the term must take greater measures to bring it to the attention of the other party.
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contra proferentum rule (of the interpretation of an ambiguous contract) against the party which proposed or drafted the contract or clause.
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doctrine of fundamental breach of contractis a breach so fundamental that it permits the distressed party to terminate performance of the contract, in addition to entitling that party to sue for damages.
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Photo Production v Securicor Ltd (doctrine of fundamental breach rejected: Where the parties are negotiating at arms length, and have set out who should bear the risks, the courts should be unwilling to interfere.