I'm not sure quite what it is you're after Sprite, but seeing as I'm revising for this topic right now, I'll give you a quick rundown of the basics!
Exemption Clauses
- Are clauses contained in a contract which seek to either limit or exclude liability for breach of contract
- Are contractual terms
- May either be exclusion or limitation clauses
- Known collectively as exemption clauses as they exempt one or both parties from a portion of his liability for breach of the contract to which he is a party
- Often highlight the inequality in bargaining strength which may exist between parties to a contract, particularly providers of goods or services and their customers
- Protection for consumers developed through common law in the latter half of the twentieth century, as the courts became generally more protective of customers rather than facilitative for businesses
Judicial Control
- For a party inserting an exemption clause into a contract to be able to rely on it, he must show:
1. The exclusion or limitation is a term of the contract (in order to be relied upon obviously)
2. That the clause seeks to protect him in relation to the actual damage suffered rather than being merely extraneous to the purpose or subject matter of the contract
3. That the clause does not fail at the number of tests developed in statute and at common law
Interesting quote - B Coote, Exemption Clauses (1964) - 'In principle the common law has allowed freedom of exclusion to an extent greater than in most judicial systems. In practice, English judges have for the most part viewed the exemption clauses themselves with disfavour, and by and large have accorded to them the narrowest effect possible.'
Incorporation of Exemption Clauses
- Similar to the 'rules' regarding incorporation of contractual terms in general
1. Where a party has signed a written agreement, he is prima facie (at first sight) bound by that agreement. This may apply even if the party suffering the effect of the exemption clause has not read it (see L'Estrange v Graucob (1934)).
2. An exemption clause will only be properly incorporated into a contract where the party subject to it has knowledge of it at the time the contract was formed (see Olley v Marlborough Court Hotel (1949))
BUT:
- Where the parties to a contract have dealt on similar terms in the past it may be possible to imply knowledge of the clause in order for it to be incorporated and therefore enable it to be relied upon (see Spurling (J) Ltd v Bradshaw (1956) and, more recently McCutcheon v David MacBrayne Ltd (1964) )
- Lord Devlin - 'Previous dealings are only relevant if they prove knowledge of the terms actual and not constructive assent to them'
Sufficiency of Notice
- Generally, the courts will only hold that an exemption clause has been incorporated into a contract if the party subject to it has been made sufficiently aware of its existence, before or at the time the contract was formed, with the obligation to do so firmly on the party inserting the clause into the contract (see Parker v South Eastern Railway Co (1877) and the comments of Lord Justice Mellish; Chapleton v Barry UDC (1940), Dillon v Baltic Shipping Co Ltd (1991), Thornton v Shoe Lane Parking (1971) and the comments of Lord Denning; Interfoto Picture Library v Stiletto Visual Programmes Ltd (1988) and the comments of Lord Justice Dillon in the Court of Appeal)
I'm running out of time, so here are the rest of the main points you should be looking at:
- The contra preferentum rule
- Andrews Bros (Bournemouth) Ltd v Singer & Co (1934)
- George Mitchell Ltd v Finney Lock Seeds Ltd (1983)
- Inconsistent oral representations - Curtis v Chemical Cleaning and Dyeing Co Ltd (1951)
- The effect of exemption clauses on third parties - Scruttons Ltd v Midland Silicones Ltd (1962) and New Zealand Shipping Co Ltd v A M Satterthwaite & Co Ltd (1975)
I hope this helps you! x x x