Business Law: Exemption Clause

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  • Topic: Misrepresentation, Tort, Damages
  • Pages : 3 (961 words )
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  • Published : November 25, 2010
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1.An exemption is a clause in a contract that exempts or removes liability from one or both parties in certain circumstances. Exemption clauses are used frequently in business organization contract. These clauses apportion risk between the parties concerned and the law upholds them, assuming the parties negotiated them while drafting the contract

2.The two ways in which exemption clauses can be incorporated in a contract are: (1) Incorporation by notice and (2) Incorporation by signature.

3.I would first ask X if he was notified of the hotel’s policy while, he was checking in. If He was informed of a policy to secure valuables at the front desk, then he was responsible for his losses and Y had no obligation to reimburse him for his losses. However, if he was not informed of Y’s policy on securing valuables while checking in then he was entitled to be reimburses by Y. He is entitled for reimbursement because the notice in the room did not form part of the contract between himself and Y. He became aware of this policy after the contract was made and therefore it cannot form part of the contract. Y is therefore responsible for replacing his valuables.

4.Tim went to Danto Auto Rental to rent a minivan for his family trip in Maxboro Estate. He was notify that the Danto Auto Rental is not responsible for any damages inflicted to any occupant of the minivan cause by mechanical problems or any vehicle accident. Tim signed the document exempting Danto Auto Rental from liability case by mechanical problems or any vehicle accident. For an exemption to be upheld there must be sufficient notice of the exemption or the exemption must be incorporated by signature. This means that the exemption must be in a contract signed by both parties or a party must be made aware of the exemption clause in reasonable time or at the time of the contract. In this case the contract was made when Tim sign the rental documents.

5.An exemption clause must satisfy both...
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