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Exemption Clauses - Coggle Diagram
Exemption Clauses
The UCTA and CRA
Non Contractual Notices
The UCTA covers exemption clauses when there is no contract between the parties
The CRA has similar provisions to unfair notices to consumers
Liability for Negligence
UCTA and CRA a person cannot exclude liability for negligently causing death or PI
Liability for breaches of contract other than negligence
UCTA - cannot exclude or vary liability for its own breach of contract unless the exemption is reasonable
CRA - all unfair terms are not binding on the consumer
Liability for breaches of contract involving the sale or hire of goods
Business to Business contracts - The Sales of Goods Act and Supply of Goods and Services Act is implied into the contract relating to goods. quality, suitability, and sample
UCTA states an implied term relating to good title cannot be excluded, if so it must be reasonable
Similar provisions under CRA
Excluding liability for misrepresentation
B2B contracts excluding or restricting liability or remedies for misrepresentation is not effective unless its fair and reasonable
In a consumer contract the term will not be binding if it is unfair
The test of reasonableness in UCTA
The term must be fair and reasonable taking into account the circumstances known, or ought to have reasonably known
When parties of equal bargaining strength have negotiated the court will not usually interfere
Guidelines in Schedule 2 (UCTA). The guidelines cover:
Relative bargaining strength of the parties
Whether the purchaser received an inducement
Was the exclusion clause known
Does the term exclude or restrict liability of a condition is not complied with, was it reasonable
was it a specific order?
Unfair Contractual Terms and Notices
UCTA - it does not only apply to exclusion clauses but also all unfair terms
CRA - Any unfair term or notice is not binding on the consumer
Requirement of good faith
CRA - if a term is unfair if it puts the consumer at a disadvantage
In assessing whether a term is unfair, the unique subject matter is taken into account
Terms that may be regarded as unfair
Term that limits or excludes death or PI
Term that the trader can alter the contract unilaterally without valid reason
a term requiring a consumer to pay a disproportionate high sum to the trader
A term being binding on the consumer but allowing the trader to avoid performing
A term to keep a deposit if the consumer cancels the contract
a term automatically extending a fixed term contract where the consumer does not indicate otherwise
A term allowing the trader to decide the characteristics of the subject matter or prince after the consumer is bound
Terms must be in plain language
Different Types of Clauses
Exemption Clause
Exclusion Clause
Limitation Clause
Validity of exemption clauses
Must be incorporated into the contract
Signed Documents
Unsigned documents and notices
Must be clear and unambiguous
Contra Proferentem rule
Must comply with statutory rues set out in CRA and UCTA
Liability for a fundamental Breach
There is no law that invalidates the exclusion clause for a fundamental breach
It is presumed that exclusion clauses were not intended to apply to serious fundamental breach , this presumption could be rebutted if the clause was drafted widely that it did cover fundamental breaches