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Exclusion clauses

1 Definition

1.1 Attempt to exclude liability in whole or in part for negligence or contractual liability.

2 Case law rules

2.1 The exclusion clause must be communicated to the offeree before he accepts the contract: Olley v. Marlborough Court Ltd.

2.1.1 If a term is included in a document notice of the term must be given before completion and the document must be one which could be expected to contain terms: Chapleton v Barry UD.C.

2.2 Must be clearly incorporated into contract:

(a) Generally, if a person signs a contract he will be bound (L'Estrange v. Graucob) unless there was a mistake or misrepresentation.

(b) Oral assertions can override exclusion clauses making them ineffective: Curtis v. Chemical Cleaning Co.

(c) A clause may be incorporated by a course of dealings: Hollier v Rambler Motors.

2.3 Where a term is particularly unusual and onerous it should be highlighted. Failure to do so may mean that the clause is not incorporated.

2.4 Wording must be sufficient to exclude the liability in question:

(a) Ambiguities will be construed against the party relying on them ‘contra proferentum rule’.

(i) Court presumes a clause is not intended to defeat main purpose of contract.

(ii) However a clause can be drafted specifically to exclude liability for a fundamental breach: Photo Productions v Securior Transport ltd.

NB: Would now be subject to ‘reasonableness’ test.