Tutorial 7 PDF

Preview

Summary

week 7...

Description

TUTORIAL 7 – EXCLUSION/ EXEMPTION CLAUSES

Chapelton v Barry UDC [1940] 1 KB 532 George Mitchell v Finney Lock Seeds [1983] 2 All ER 732 Hollier v Rambler Motors [1972] 2 WLR 401 L'Estrange v Graucob [1934] 2 KB 394 McCutcheon v McBrayne (1964) UKHL 4 Olley v Marlborough Court [1949] 1 K.B. 532 Spurling v Bradshaw [1956] 1 WLR 461 Thornton v Shoe Lane Parking [1971] 2 WLR 585

Reading: See text book index Before the class, prepare answers to the following:

1. Consider the following scenarios and explain whether, and by what means, the exclusion clause has been incorporated into the contract i.e. by course of dealing, by notice, by signature; state the legal authority for your answer (case law).

a. C booked into a hotel. She had never been there before. The contract was made at the reception desk where there was no mention of an exclusion clause. In the hotel room on the back of the door a notice sought to exclude liability of the hotel proprietors for any lost, stolen or damaged property. The claimant had her fur coat stolen sue to the hotel’s negligence. The exclusion clause wasn’t included in the contract as C wasn’t aware of it at the time as it wasn’t present nor presented in the contract which she signed, It wasn’t incorporated into the contract at the acceptance stage. As C wasn’t given any notice of the clause. The notice is ineffective as the

contract had already been made and C hasn’t seen the notice, therefore it’s not apart of the contract. Olley v Malborough Court Ltd [1949] AN exclusion clause must be incorporated into a contract at the offer/acceptance stage to be effective.

b. C was injured in a car park partly due to the defendant's negligence. C was given a ticket on entering the car park after putting money into a machine. The ticket stated the contract of parking was subject to terms and conditions which were displayed on the inside of the car park. One of the terms excluded liability for personal injuries arising through negligence. The machine constituted the offer and the acceptance was C putting money into the machine, the ticket was dispensing after the acceptance took place and the clause wasn’t incorporated into the contract. The clause must be brought to the other party’s attention. Not effective. Thornton v Shoe Lane Parking [1971] 2 WLR 585 Court of Appeal

c. C took a deckchair from a pile on the promenade at Blackpool. There was a sign by the chairs indicating the price of £2 per day. The attendant later took his money and gave him a receipt. The conditions of hire, including an exclusion clause, were on the back of receipt. C was injured when the deckchair collapsed, but Blackpool Council tried to get out of liability by relying on the exclusion clause. For the clause to be effective incorporated into a contract an exclusion clause must be brought to the other persons attention and not hidden in a document. Chapelton v Barry UDC [1940] KB 532

d. C had used the services of the defendant garage on 3-4 occasions over a five-year period. Each time he had been asked to sign a document excluding liability for any damage. On this occasion the contract was made over the phone and no reference to the exclusion clause was made. The garage damaged the car during the repair work and sought to invoke the exclusion clause to avoid liability. The exclusion clause isn’t valid as it can’t be expected for one party to remember the clause from one transaction to the next. Hollier v Rambler Motors [1972] 2 WLR 401 e. C’s car sank in a car ferry owned by the defendant. C had used the car ferry on a few occasions previously. Sometimes he had been asked to sign a document containing an exclusion clause sometimes he had not been asked to sign a form. On this occasion he had not been asked to sign a document. The defendant sought to rely on the exclusion clause. There’s no consistency in the course of dealings and the clause wasn’t incorporated as he didn’t sign a document, therefore the defendant is liable to pay damages to C. McCtcheon v MacBrayn [1963] 1 WLR 165

2. Read ss. 2-11 of the Unfair Contract Terms Act 1977 and state whether the following are valid clauses? State the relevant section of UCTA.

a. Huddersfield Computers Ltd supply refurbished PCs and laptops to a number of Kirklees businesses. They deal on their own standard written contract terms. Written in small letters on page 4 of the 6-page contract is the following term. “HC Ltd give no guarantee that we have good title to any of the used items that we supply.” S 6 (1) (a) NOT VALID

Misrepresentation.

S.6 (1) (a) – S.12 Sale of Goods Act 1979- Seller’s implied undertakings. In a contract, there is an implied term on the part of the seller. (Look at S.12 SoG A [1979]) b. Mr Sweetie has a sweet shop in Bradford. He buys his sweets from a wholesaler called Northern Rock Ltd (NRL). NRL deal on their own standard terms. Mr Sweetie has a regular order for Sherbet Dabs, one of his best sellers. One of the terms states that NRL accept no liability for failure to fulfil regular orders or to supply goods of satisfactory quality. 

S 6 (1A) breach of the obligations, s.13,14 or 15 SOGA 1979, implied term that undertakings as to conformity of goods with description or sample or as to their quality or fitness for a particular purpose.



S 3 (2) B) (i) – ‘to render a contractual performance substantially different from that which was reasonably expected of him’ FAILURE FOR REGULAR ORDERS. (all of S.3), CAN’T EXCLUDE OWN EXPOSURE TO LIABILITY. Its expected for them to fulfil orders made 

It goes against S 11(1) the Reasonableness test as its no a reasonable term it’s not a’ fair or reasonable term’ for not accepting no liability for failure to fulfil regular orders or to supply goods of satisfactory quality.

3. In the class, discuss in pairs and decide on the answers to these MCQs: a. To which type of contract does the Unfair Terms in Consumer Contracts Regulations 1999 apply?

i.

Contracts for the sale or supply of goods or services where standard terms of business are used, and one party is acting in the course of business and the other party acts as a consumer.

ii.

All contracts where one party is acting in the course of business and the other party acts as a consumer.

iii.

All contracts for the sale or supply of goods or services where standard terms of business are used.

iv.

It only applies to exemption clauses in contracts. b. Hari is in York for the first time and decides to leave his bag containing his £300 camera at Train Ltd's left luggage lockers for the day. He places his bag in the locker and after inserting the £10 fee, the door locks and a ticket is issued. The ticket states that Train Ltd are not liable for any loss, damage or theft to items valued over £50 left in lockers. Hari's locker is broken into by Fred and his camera is stolen. Can Hari claim £300 from Train Ltd?

i.

No, because the exemption clause states the limit is £50

ii.

No, because his camera has been stolen by someone other than Train Ltd.

iii.

Yes, because the exemption clauses are only valid if they are signed.

iv.

Yes, because the exemption clause was dispensed after the contract was made.

c. Where a person acting in the course of a business includes a term in a contract which excludes liability for death and personal injuries through negligence, the term is: i.

Binding on the parties provided they are not dealing as consumers.

ii.

Invalid. Can’t exclude for death.

iii.

Invalid unless it is reasonable.

iv.

Only valid if it is brought to the attention of the other party d. Which one of the following statements is true?

i.

Under the Unfair Contract Terms Act 1977 the burden of proving an exemption clause is reasonable is on the party seeking to rely on it.

ii.

Only if a contract is written must the party seeking to have the exemption clause set aside prove it is unreasonable.

iii.

In both written and oral contracts, the party seeking to have the exemption clause set aside must prove it is unreasonable.

iv.

Under the Unfair Contract Terms Act 1977 exemption clauses can never be set aside in written contracts.

Notes from class We have standard term contracts cause its easy it creates certainty Keep it logical...