Exclusion Clause cases PDF

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Exclusion Clause cases

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Suisse Atlantique

Lord Denning’s fundamental breach doctrine was disapproved, acted for help from legislature with control over exemption clause

Photo Production v Securicor

A contract for provision of security services by Securicor at the Claimant’s factory. The security guard’s negligence caused the destruction of the claimant’s factory by fire. The contract contained a clause excluded liability for negligence of Securicor’s workers. Held: Where the parties are negotiating at arms length, and have set out who should bear the risks, the courts should be unwilling to interfere.

George Mitchell v Finney Lock Seeds

The Claimant farmer George Mitchell purchased 30lb of Cabbage seed from the defendants for £192. The claimant planted the seed over 63 Acres and spent many hours of labour on the crops. The cabbage seeds only produced a small green leaf plant not fit for human consumption. The contract contained a clause which limited liability to the price of the seeds. The claimant had lost £60,000 + interest on the defective seeds. Held: Clause was unreasonable as the buyer would not have been aware of the fault whereas the seller would.

Philips v Hyland

The claimant (Phillips) hired a JCB excavator from Hampstead Plant Hire. Under the contract the claimant had to have a driver provided by Hampstead. The contract also contained a clause stating that the driver became the servant of the hirer which would therefore negate Hampstead’s liability arising from the negligence of the driver. The driver (Hyland) crashed the JCB into a building owned by the claimant causing extensive damage. The Court of Appeal held that the term acted as an exclusion clause and was unreasonable because: 1. the contract was entered into at short notice 2. The claimant was given little opportunity to familiarise himself with the term 3. The claimant was forced into a take it or leave it situation as had no choice but to accept the driver. 4. There was little opportunity to arrange own insurance cover 5. The claimant had no choice in the selection of driver or to assess their qualifications or suitability to do the job.

Thomson v Lohan

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R&B Customs Brokers v United Dominions Trust

Small company that bought a company car from Brokers. The car leaked which violated the requirements of the sale of goods act (Sale good should be at suitable quality and fit for purpose) the clause between the parties that any kind of information about fitness or purpose would be excluded. R&B stated that this was a violation of S6 Unfair Contract Terms Act (you can not exclude basic standards from the Sales of good act) Was R&B a consumer or business? They are a business. Held: If the exclusion clause had be subjected to a S11.2 test, it would have passed. It was reasonable to exclude liability in this situation however this was irrelevant as R&B was acting as a consumer. The sales of good act was fit for business.

Smith v Eric S. Bush

A survey report of the claimant’s house carried out by the defendant failed to advise on some structural damage to the property which resulted in the chimney breast collapsing. There was no contractual relationship between the claimant and defendant as the mortgage company arranged the survey and the claimant made payment to the mortgage company. The contract between the claimant and the mortgage company contained a clause exempting the surveyor from liability. In considering if such a clause was reasonable under the Unfair Contract Terms Act 1977 the court took into account the fact that it was a modest house to be used as the family home and concluded that it was an unreasonable clause and therefore ineffective. The House of Lords held that it might be reasonable for a surveyor to exclude liability if the property was of higher value or to be used for investment or business purposes.

St Albans City and District Council v International Computers

Defective computer program dispute, International Computers Limited its liability to £100,000. Could damages be limited by a damage limitation clause, or was the clause defective as an unfair contract term within the meaning of the Unfair Contract Terms Act 1977? Held: Unfair contract term present. Section 3 of UCTA applied, as the limitation clause was a standard term which had not been negotiated. ‘Goods’ are things told on tangible media, such a software sold on a disc

Feldaroll Foundry Plc v Hermes Leasing Ltd

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