Law of Contract - Exclusion Clauses

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  • Topic: Unfair Contract Terms Act 1977, Contract, Unfair Terms in Consumer Contracts Regulations 1999
  • Pages : 3 (1003 words )
  • Download(s) : 275
  • Published : December 6, 2012
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An exclusion clause is a term in a contract purporting to exclude or restrict the liability of one or more parties to the contract for breach of obligation . Exclusion clauses are controlled by common law and statute. The Unfair Contract Terms Act 1977 (UCTA 1977) and the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR 1999) confine the extent to which an individual can exclude or limit his business liability towards consumers. The Office of Fair Trading runs an unfair terms unit which inspects exclusion clauses and enforces the 1999 regulation. In this case, there are two exemption clauses in which Practical Electricals Ltd. is trying to exclude liability. Exclusion clauses must be properly incorporated into the contract as a term and cover the loss suffered. Incorporation will be effective if a written document is signed and even if not read (L’Estrange v Gracob) . Incorporation of an exclusion clause by writing will, however, be unenforceable if an offeree has been persuaded to sign by misrepresentation (Curtis v Chemical Cleaning and Dyeing Co Ltd) . Moreover, exclusion clauses can be incorporated into the contract by previous dealing (Spurling v Bradshaw) . Exclusion clauses can be incorporated by reasonable notice (Parker v South Eastern Railway) . The general rule for incorporation by notice is that the exclusion clause must be brought to the notice of the other party before or at the time the contract is made: Olley v Marlbourough Court Hotel , whereby notification was made after formation of the contract. The same principle follows in Thornton v Shoe Lane Parking Ltd , whereby the court has prevented reliance on exclusion clauses that were not fairly and reasonably brought to the other party’s attention. Therefore, applying the two above cases to the present case, the exclusion clauses may not be enforceable as the document containing the clauses was handed over after the contract was made, that is when Marion received the receipt and...
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