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Business Law Lecture 5: Contractual Terms and Exemption Clauses (Exemption…
Business Law Lecture 5: Contractual Terms and Exemption Clauses
Terms
Express Terms
Implied terms
Implied by the Courts
obvious that is goes without saying
give the contact business efficacy (to make the contract workable)
Implied by the Statute (written law)
E.g Sale of Goods Act (Cap 393)
Implied by the Custom or Trade Usage
Well know (used a lot of times) within a particular trade or industry
Representations
It is a statement that encourages one to enter into a contract.
Terms v Representations
If the representation is false, the innocent party's claim will be for misrepresentation
If a party does not perform a term of the contract, the innocent party can bring a claim for breach of contract.
Exemption Clauses
Incorporated into the contract
Incorporated by signature
L'estrange v F. Graucob Ltd (1934)
Incorporated by notice
(A) The party who wants to rely on the exemption clause must take reasonable steps to bring the exemption clause to the notice of the other party before or at the time of the contract.
Olley v. Marlborough Court Ltd (1949)
(B) The document containing the exemption clause must be a document in which reasonable person would expect to find terms and conditions
Chapelton v Barry Urban District Council
Incorporated by previous course of dealing
Kendall v Lillico (1968)
Has not been made ineffective either by statute or at common law
An exemption clause that excludes liability for negligence (careless conduct) resulting in death or personal injury is void-- Unfair Contract Terms Act
In the case of consumer contracts and standard form contracts, a part y cannot exclude or limit liability for breach of contract unless the exemption clause is reasonable-- Unfair Contract Terms Act.
Press Automation Technology Pte Ltd v Trans-Link Exhibition Forwarding Pte Ltd (2003)
Clear and unambiguous
If the exemption clause is ambiguous and is capable of more than one interpretation, the courts will choose the interpretation which is least advantage to the party trying to rely on the exemption clause for protection. This is know as the
contra proferentem rule
Conditions and Warranties
Condition is a term intended by the party to be very important and when one breaches a condition, the innocent party is entitled to terminate the contract.
A warranty is a less important term of the contract and a breach of a warranty only allows the innocent party to claim damages for the breach.