Topic 6 Exclusion Clauses and Australian Consumer Law (ACL) summary PDF

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Exclusion Clauses and Australian Consumer Law (ACL)...

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Exclusion Clauses An exclusion clause is a term in a contract that seeks to either totally exclude or limit the liability of a breaching party (called either an exclusion clause or a limitation clause, respectivelyExclusion clauses may be contained in contractual documents, printed on tickets, receipts and dockets or on signs. The distinction is important as the rules differ.

Exclusion Clauses The Signature Rule (exclusion clauses on signed documentsA person is bound by all of the terms of any contract that they sign whether or not they have read it, or understood it: L’Estrange v Graucob Ltd There are 2 exceptions to the signature rule: 1.

Misrepresentation: Curtis v Chemical Cleaning & Dyeing Co

2.

Non est factum: Gallie v Lee, Petelin v Cullen

• Exclusion Clauses Unsigned documents (exclusion clauses on tickets, etc.To test whether the clause has become part of the contract, the courts will apply two tests: 1.

the nature of the document test, and

2.

the reasonable notice test

The tests are objective and applied sequentially.

Exclusion Clauses The nature of the document test involves examining the docket and asking what is its role in the transaction? Would a reasonable person expect it to contain terms of the contract? (Objective testDoes it have any other logical function, such as proving payment (a receipt, or proving ownership (a voucher? See: Causer v Brown, Chapelton v Barry Urban District Council Note: dockets are signed after receipt of goods, it is too late to try to include new terms in the contract, which has already been performed: Walter Wright Pty Ltd v DJ Hill & Co Pty Ltd

Exclusion Clauses The reasonable notice test is applied if the court concludes that the document is a contractual document. This test involves examining whether reasonable steps be taken by the business operator to bring the clause to the notice and attention of the customer. Examples:  Parker v South Eastern Railway Co [clause on back of ticket]  Thompson v L. M.&S. Railway Co [clause on train timetable on platform]  Thornton v Shoe Lane Parking [clause hidden on back of pillar in car park]

Exclusion Clauses Exclusion clauses printed on signs Notice of an exclusion clause on a sign may be actual or constructive - Balmain New Ferry Co v Robertson. Those who see and read the sign have actual notice of the clause. Those who could have, but didn’t read it have constructive notice. Notice of the exclusion clause must be given before or at the time the contract is formed: Olley v Marlborough Court Ltd Exclusion Clauses Exclusion clauses printed on signs Prior dealings may be relied upon to establish notice (provided they are sufficient and consistent: Hollier v Rambler Motors If an exclusion clause may be interpreted more than one way, courts will construe exclusion clauses in favour of the customer (contra proferentem rule: White v John Warwick & Co

Australian Consumer Law The legislation provides consumers guarantees for contracts which comply with the definition provided in s3:

A person is a ‘consumer’ if: a The price of goods or services does not exceed $40,000 b Ifpriceexceeds$40,000,thegoodsorservicesareth ekindnormallyusedfor personal, domestic or household purposes c The goods are a vehicle or trailer used primarily for transporting goods on public roads See: Carpet Call v Chan

Australian Consumer Law Goods must not, however be purchased for: a Resupply, or b Transformation in trade or commerce (using to repair or treat other goods or fixtures on land. I.e., to make a new/different product to sell out of the bought goods. Note: ‘trade and commerce’ means in the course of business – excludes private sales. If the contract is a consumer contract according to the definition of the Act, the following terms will be implied into the contract and cannot be excluded (s64: a Substantially fit for their common purposes b Fit for any other disclosed purpose (s55

c Correspond with description (s56 d Correspond with sample (s57 e Repairs and spare parts must be reasonably available for a reasonable time (s58 f Buyer receives undisturbed title (s52: will not apply if security, charge or encumbrance disclosed to buyer prior to sale

Unconscionable Conduct Unconscionable Conduct means unfair or unjust behavior that offends good conscience and deals with transactions between parties with unequal bargaining power. Equity permits the contract to be set aside by an innocent party. Hint: Cases usually involve banks obtaining guarantees for loans Unconscionable ConductThe court set out 4 elements required to prove unconscionable conduct in Commercial Bank of Australia Ltd v Amadio:  The plaintiff was in a position of special disadvantage  It must have substantially affected their ability to protect themselves (legal rights and interests  The defendant must have, or should have known of the plaintiff’s disability and taken

advantage of it  The actions of the defendant were unconscionable (unfair or unjust See also: Nolan v Westpac Banking Corporation Ltd...