Term
| What is an exemption clause? |
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Definition
| An exemption clause is a term |
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Term
| If you have an exemption clause in an exam, how do you go about doing it? |
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Definition
| Before addressing the exemption clause, you have to go through all the 'terms' stages... e.g. identify the terms, identify the breach, etc.. |
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Term
| Exemption clauses - common law = |
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Definition
| how the courts cover exemption clauses |
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Term
| Exemption clauses - statutory controls = |
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Definition
| how parliament covers exemption clauses |
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Term
| Diplock LJ definition of an exemption clause... |
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Definition
'a term which excludes or modifies an obligation / liability - liability may come from breach of a primary obligation or a secondary obligation'
(primary obligation = obligation within the obligation. Secondary obligation = obligation to compensate for breaches of primary obligations) |
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Term
| The courts don't like exemption clauses. How do the courts & parliament control them? |
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Definition
Look at it as a set of hurdles which have to be overcome before an exemption clause is valid.
Incorporation
Construction
UCTA '77
Regs (regulations - apply to consumers only, not B2B)
(B2B therefore = ICU) |
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Term
| What is the handy pneumonic which helps you to remember the hurdles which have to be overcome by an exemption clause in order for it to be enforceable? |
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Definition
ICUR (or ICU for B2B, as the Regs only apply to consumers)
Incorporation
Construction
UCTA '77
Regs |
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Term
| What does the I in ICUR stand for? |
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Definition
| Incorporation - certain elements which have to be satisfied for there to be a valid incorporation of the EC in the contract (HOW TO GET IT IN THERE AND KEEP IT IN THERE) |
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Term
| What does the C in ICUR stand for? |
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Definition
| Construction - certain elements which have to be satisfied for an exemption clause to be interpreted as an exemption clause & therefore enforced as intended |
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Term
| What does the U in ICUR stand for? |
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Definition
UCTA - Unfair Contract Terms Act 1977
The exclusion clause MUST abide by the rules in this Act in order for it to be enforceable |
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Term
| What does the R in ICUR stand for? |
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Definition
Regulations - Unfair Terms in Consumer Contract Regs 1999.
ONLY APPLICABLE TO CONSUMER CONTRACTS
The EC MUST abide by the rules in these regulations in order for it to be enforceable. |
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Term
| What are the three ways of achieving incorporation? |
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Definition
Signature
Reasonable notice
Consistent and regular course of dealings |
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Term
| What is the general rule w.r.t 'signature'? |
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Definition
Signature binds - if you sign something, you are bound by it, regardless of whether or not you've read it. (only bound by what is included/referred to in the contract you sign - all terms must be given before or at the time of transacting)
(some exceptions) |
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Term
| What is the leading case on 'signature binds'? |
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Definition
| L'Estrange v Graucob [1934] |
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Term
| L'Estrange v Graucob [1934] |
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Definition
LEADING CASE ON 'A SIGNATURE BINDS'
'WHEN A DOCUMENT CONTAINING A CONTRACTUAL TERM IS SIGNED, THEN, IN THE ABSENCE OF FRAUD... THE PARTY SIGNING IS BOUND AND IT IS IMMATERIAL WHETHER HE READ THE DOCUMENT OR NOT'
C = old lady who ran a tea shop
D = conmen who sell C a cigarette machine
Contract was written in tiny writing on brown paper
Contract contained EC that removed liability in the event that the machine didn't work
C took delivery & the machine didn't work
HELD - signature binds... C lost her claim |
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Term
| What are the exceptions to the rule that 'a signature binds'? |
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Definition
a) Misrepresentation
b) If the document has no contractual effect
c) If the defence 'Non est factum' applies
d) big red hand rule (only in extreme circumstances) |
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Term
| Curtis v Chemical Cleaning [1951] |
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Definition
SIGNATURE WILL NOT BIND IF THERE HAS BEEN MISREPRESENTATION
C took her dress to be dry cleaned
C was given a form to sign
C asked what it was for
D told her that it covered their liability for damage to beads and sequins
C signed the form
C got her dress back after cleaning, and the material on it had been damaged
C tried to make a claim, but it turned out that the EC also excluded liability for damage to material
HELD - as there had been misrepresentation, the signature did not bind. |
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Term
| Grogan v Robin Meredith Plant Hire [1996] |
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Definition
IF THE FORM YOU SIGN HAS NO CONTRACTUAL EFFECT, YOUR SIGNATURE ON IT WILL NOT BIND
TIMESHEETS DO NOT HAVE CONTRACTUAL EFFECT (if in your exam you meet something similar to a time sheet, you have to draw an analogy)
C signed a timesheet
Timesheet included some ECs
D tried to claim that the timesheet was a contract
HELD - the timesheet was not a contract, therefore, the C was not bound by the ECs on it. |
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Term
| What type of documents might the court decide have no contractual effect? |
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Definition
Timesheets - if you meet a similar type of document in your exam, you must draw an analogy
Grogan v Robin Meredith Plant Hire [1996] |
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Term
| What does 'Non est factum' mean? |
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Definition
The deed is not mine - e.g. fraud
If someone who cannot read and understand a document (because they are BLIND AND/OR SENILE) is told by another person that the document they are signing contains something other than what it actually contains, the person who signed can rely on this defence. |
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Term
| Who are the only people who can use the defence 'Non est factum'? |
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Definition
People who are unable to read and understand a document
MUST BE BLIND OR SENILE
(not including a glasses wearer who isn't wearing their glasses) |
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Term
| Saunders v Anglia Building Society [1971] |
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Definition
THE DEFENCE OF NON EST FACTUM CAN ONLY BE USED BY PEOPLE WHO ARE BLIND AND/OR SENILE
Nephew gets C to sign a document which = signing away her house to the D
C cannot read it because her glasses were broken
Nephew lied to C about content of the contract
When D tried to claim the house, C went to court claiming that she hadn't been able to read the contract and had been lied to by the nephew as to the contract's content
HELD - broken glasses was not a good enough excuse. Defence can only be used by people who are blind or senile. |
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Term
| What are the different ways of achieving incorporation? |
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Definition
1. Signature
2. Reasonable Notice
3. Consistent and regular course of dealing |
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Term
| The second way of achieving incorporation is 'reasonable notice'. What does this mean? |
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Definition
| Proferens must take reasonable steps to bring the EC to the other party's notice. |
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Term
| Parker v South Eastern Railways [1877] |
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Definition
IF THE PROFERENS HAS TAKEN REASONABLE STEPS TO BRING THE EC TO THE OTHER PARTY'S NOTICE, THE EC IS INCORPORATED, EVEN IF THE OTHER PARTY HASN'T NOTICED IT
WRITTEN ON THE BACK OF A TICKET STUB WITH PTO DIRECTIONS = REASONABLE STEPS.
C put a bag in to a cloakroom
C was given a ticket by the D
Ticket says 'see back'
Back of ticket says 'limit of £10 liability'
C does not look at back of ticket
C goes to collect bag
C's bag is gone
C's bag was worth a lot more than £10
C sued D, saying that because he hadn't read it, he couldn't be bound by it
HELD - D had taken reasonable steps to bring the EC to the C's notice. Ticket clearly said 'see back', and on the back it clearly said that liability was limited to £10.
Therefore, EC had effect |
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Term
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Definition
INCORPORATION OF AN EC BY REFERENCE TO ANOTHER DOCUMENT (W.R.T REASONABLE NOTICE HURDLE) = SUFFICIENT... PROVIDED THERE ARE CLEAR DIRECTIONS ON WHERE TO FIND THE OTHER DOCUMENT
IF SOMEONE CANNOT READ, IT DOESN'T MATTER.
C got off a train before it got to the platform & injured herself
C makes a claim against D
On the back of the C's ticket it said 'subject to the T&Cs on the timetables in the station'
T&Cs included an exemption clause
C argued that because the EC wasn't on the ticket, there wasn't reasonable notice
However, court HELD - there were clear directions on where to find the T&Cs (on the train timetable). Therefore, EC was successfuly incorporated (reasonable notice had been given) by reference to another document |
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Term
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Definition
INCORPORATION BY REFERENCE = POSSIBLE, EVEN WHERE THE OTHER DOCUMENT TO BE REFERRED TO IS A DIFFERENT EDITION OF A NEWSPAPER (E.G. AN EARLIER/LATER EDITION OF THE NEWSPAPER)
C got a scratchcard from a certain edition of a newspaper
Scratchcard said 'subject to our T&C's in another edition of the newspaper' (e.g. T&Cs were contained in a separate/different edition of the newspaper
HELD - reaosnable notice had been given, by way of reference. |
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Term
| At what point must the reasonable notice be given? |
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Definition
| Before or at the point of contracting - applicable to standard reasonable notice, and reasonable notice by reference. |
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Term
| Olley v Marlborough Court Hotel [1949] |
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Definition
REASONABLE NOTICE MUST BE GIVEN BEFORE, OR AT THE TIME OF CONTRACTING
C checked in to a hotel by signing a contract
Cs then go up to their hotel room, and on the back of the door = 'no liability for any loss or damage'
(the contract they had signed at the desk made no reference to this)
Cs coat was stolen
HELD - it was too late, the contract had been concluded at the desk, nothing further could be added in - (e.g. there should have been a sign on the front desk)
REASONABLE NOTICE HAD NOT BEEN GIVEN |
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Term
| If you go to a nightclub, and then you go to the cloakroom, and put your coat in the cloakroom, and there is a sign in the cloakroom saying 'no liability', will they have given reasonable notice? |
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Definition
| YES - as the contract you form in the cloakroom is separate to the one you form when entering the club. |
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Term
| Thornton v Shoe Lane Parking [1971] |
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Definition
REASONABLE NOTICE MUST BE GIVEN IN ADVANCE OR AT THE POINT OF ACCEPTANCE
WHEN DEALING WITH A MACHINE, THE OFFER IS MADE WHEN THE PROPRIETOR OF THE MACHINE HOLDS IT OUT AS BEING READY TO RECEIVE MONEY. THE ACCEPTANCE IS MADE WHEN THE CUSTOMER PUTS THEIR MONEY IN THE MACHINE, THEREFORE, THE CONTRACT IS CONCLUDED AT THAT POINT. THEREFORE, IF THE TICKET YOU THEN RECEIVE FROM THE MACHINE CONTAINS ADDITIONAL TERMS, THESE TERMS WILL NOT BE INCORPORATED - NO REASONABLE NOTICE
C went to a car park in a car
Car park had board which stated prices (=offer) + 'excluded liability for damage to CARS)
C put money into the machine (=acceptance)
(at this point, the contract is concluded, as he is dealing with a machine)
Ticket came out of machine
Back of ticket said 'see T&Cs inside car park'
T&Cs inside car park excluded liability for injury to persons
C was injured in the car park
HELD - because C was dealing with a machine, contract was well and truly complete when he put his money in the machine (he was then bound by the terms on the notice outside the car park). Therefore, reasonable notice was NOT given (w.r.t PI exclusion), as he was only directed to the T&Cs after the contract was formed (received his ticket after the contract was formed) |
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Term
| Henderson v Stevenson [1875] |
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Definition
| WHERE A DOCUMENT DOES NOT HAVE CLEAR WORDS ON THE FACE OF IT, DIRECTING ATTENTION TO AN EXEMPTION CLAUSE ON THE REVERSE OF IT, IT IS UNLIKELY THAT SUCH A CLAUSE WILL BE INCORPORATED |
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Term
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Definition
| IF THERE ARE CLAUSES ON A DOCUMENT THAT HAVE BEEN RENDERED ILLEGIBLE, E.G. BY A DATE STAMP, IT IS UNLIKELY THAT THEY WILL BE DEEMED INCORPORATED |
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Term
| What should happen w.r.t onerous ECs in reasonable notice situations? |
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Definition
| Big red hand rule. Thornton v Shoe Lane Parking [1971] |
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Term
| Which case confirms that onerous ECs should be pointed out with a big red hand (w.r.t reasonable notice situations, NOT signature)? |
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Definition
| Thornton v Show Lane Parking [1971] (in this case, Denning declared that the red hand rule was also applicable to ECs) |
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Term
| Which case shows that w.r.t signatures, 'signatures will incorporate onerous clauses except in EXTREME circumstances (where there has been fraud or duress)? |
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Definition
| Chemical Transport inc. v Exnor Craggs Ltd [2000] |
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Term
| Chemical Transport inc. v Exnor Craggs Ltd [2000] |
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Definition
| A SIGNATURE WILL INCORPORATE A BIG-RED-HANDED EC(REGARDLESS OF HOW ONEROUS THE CLAUSE IS), UNLESS THERE HAS BEEN SOME FRAUD OR DURESS. |
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Term
| Which case confirms that the document which provides you with reasonable notice MUST be a contractual document? |
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Definition
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Term
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Definition
THE DOCUMENT WHICH PROVIDES REASONABLE NOTICE MUST BE A CONTRACTUAL DOCUMENT / SOMETHING A REASONABLE MAN WOULD EXPECT TO HAVE CONTRACTUAL EFFECT.
C hired a deckchair
D handed C a raffle ticket after he had rented the chair
An EC was written on the back of the deck chair, excluding liability for injury
C had an accident on the chair
C sued D
HELD - a reasonable man would not expect an EC to be written on the back of a random scrappy little receipt. Therefore, the EC was not incorporated. THE DOCUMENT WHICH PROVIDES REASONABLE NOTICE MUST BE A CONTRACTUAL DOCUMENT / SOMETHING A REASONABLE MAN WOULD EXPECT TO HAVE CONTRACTUAL EFFECT. |
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Term
| How can 'course of dealings' incorporate an EC |
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Definition
| Where a clause has been brought to the notice of the other party during previous dealings, it may be implied into the current transaction to give effect to the presumed intentions of the parties, even though it has on this particular occasion been omitted. |
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Term
| In order for 'course of dealing to incorporate an exemption clause, what must happen / have happened? |
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Definition
| There must have been a regular and consistent course of dealings between the two parties over a period of time. |
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Term
| Which cases can be used to show whether a course of dealing will be deemed to satisfy the regular and consistent requirements? |
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Definition
McCutcheon v David MacBrayne [1964]
Hollier v Rambler Motors [1972]
Harry Kendall & Sons V William Lillico Ltd [1969]
Petrotrade Inv v Texaco [2000] |
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Term
| Harvey v Ventilatorenfabrik [1988] |
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Definition
| THE CONTRACT WAS WRITTEN IN GERMAN, AND AN EXCLUSION CLAUSE WAS INSERTED WITHOUT THE KNOWLEDGE OF THE OTHER PARTY. THE PARTY RELYING ON THE CLAUSE KNEW THAT THE OTHER COULD NOT READ THE LANGUAGE IN WHICH THE CLAUSE WAS WRITTEN. THE CA HELD THAT THE CLAUSE IN QUESTION HAD NOT BEEN INCORPORATED. |
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Term
| McCutcheon v David MacBrayne [1964] |
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Definition
| SOMETIMES ASKED TO SIGN & SOMETIMES NOT = NO CONSISTENCY = NO COURSE OF DEALING INCORPORATION |
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Term
| Hollier v Rambler Motors [1972] |
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Definition
3 OR 4 TIMES IN 5 YEARS = NOT REGULAR ENOUGH
EC excluding liability for fire damage
C had put his car in garage 3-4 times in last 5 years
On at least 2 occasions he had signed a form
HELD - not regular enough to = course of dealing incorporation |
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Term
| Harry Kendall & Sons V William Lillico Ltd [1969] |
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Definition
| 3-4 TIMES PER MONTH FOR 3 YEARS = REGULAR ENOUGH = INCORPORATED |
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Term
| Petrotrade Inv v Texaco [2000] |
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Definition
| 5 TIMES OVER 13 MONTHS = REGULAR ENOUGH = INCORPORATED |
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Term
| What is important to note w.r.t what will be deemed to be a regular enough course of dealing? |
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Definition
| It is important to note what the service / item is. e.g. buying an xmas tree once a year for 10yrs, chances are you would have a course of dealing. |
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Term
| The second hurdle to overcome in order to produce an enforceable EC is construction. What is construction all about? |
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Definition
| It is about the way the courts will interpret it, from the way it was constructed. Focus on interpretation, NOT construction. |
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