Term
| What is the general rule w.r.t the construction of an EC? |
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Definition
PROFERENS = PERSON RELYING ON THE CLAUSE
They will be interpreted contra proferentem (this means that if there is any doubt as to the meaning and scope of the EC, the ambiguity will be resolved against the party seeking to rely on it) Remember, judges HATE exemption clauses.
The courts have held that clear words must be used if they are to excuse a party from its liability. |
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Term
| How is the 'contra proferentem' rule applied when dealing with limitation clauses? |
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Definition
| When dealing with limitation clauses, the courts apply the contra proferentem rule with less rigour than with ECs. (however, if a limitation clause is pretty unreasonable, it will be dealt with more stringently) |
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Term
| Which case confirms that the contra proferentem rule is applied less rigourously why dealing with limitation clauses? |
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Definition
| Ailsa Craig Fishing Co Ltd v Malvern Fishing Co. [1983] |
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Term
| Ailsa Craig Fishing Co Ltd v Malvern Fishing Co. [1983] |
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Definition
THE ONLY TEST WHEN DEALING WITH LIMITATION CLAUSES IS THAT THE LIMITATION CLAUSE MUST BE 'MOST CLEARLY AND UNAMBIQUOUSLY EXPRESSED'
The contra proferentem rule is applied less rigourously why dealing with limitation clauses |
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Term
| Houghton v Trafalgar Insurance Co. Ltd [1934] |
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Definition
CASE WHICH SHOWS THAT THE COURTS WILL INTERPRET ECs CONTRA PROFERENTEM & WILL GIVE WORDS THEIR ORDINARY MEANING
(LOAD WAS GIVEN IT'S ORDINARY MEANING OF WEIGHT, RATHER THAN BEING HELD TO = PEOPLE)
D = car insurance company
ec = 'No liability if the car was used in excess of load'
C had given 6 people a lift in a 5 seater-car
Accident happened
D tried to rely on EC
HELD - Load could mean people, but it could also mean weight. As the car could easily carry the weight of all the people, the car was not in excess of load. Therefore, the insurance company had to pay up. |
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Term
| What is the 'route' to take when considering construction of an EC? |
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Definition
1) Contra proferentem? (Y = end)
2) Deals with negligence? (N = end)
3) Canada Steamship test |
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Term
| If an EC can be interpreted contra proferentem, what happens? |
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Definition
| The EC fails at this point |
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Term
| If an EC can't be interpreted contra proferentem, and DOESN'T refer to negligence, what happens? |
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Definition
| The EC has passed the construction hurdle |
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Term
| If an EC can't be interpreted contra proferentem, and DOES refer to negligence, what happens? |
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Definition
| Must apply the Canada Steamship test |
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Term
| If an EC is excluding liability for negligence, what does negligence = in these circumstances? |
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Definition
Negligance in the sense of a breach of duty of care in tort
AND / OR
Breach of contractual duty to exercise reasonable care and skill (e.g. s13 SGSA 1982) |
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Term
| Why is it unlikely that you will come accross a contract which specifically says that it excludes negligence? |
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Definition
| Because who in their right mind would sign a contract which explicitly says it excludes for negligence... |
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Term
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Definition
1) Does the clause specifically say negligence, or does it refer to a synonym of negligence? (if yes, EC works)
2a) (if 1 = synonym) Is the clause wide enough to cover negligence?
3) Is the clause too wide - in that it could actually be covering something else (as well as negligence)? |
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Term
| CANADA STEAMSHIP TEST - If you have an EC which specifically uses the word negligence, what happens? |
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Definition
| The EC succeeds in excluding for negligence. |
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Term
| CANADA STEAMSHIP TEST - If you have an EC which uses a synonym of negligence, what happens? |
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Definition
| The courts will then consider whether, the clause is wide enough to cover negligence. |
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Term
| CANADA STEAMSHIP TEST - If you have an EC which uses a synonym of negligence, and is wide enough to cover negligence, what happens? |
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Definition
| The courts will then consider if it is too wide, in that it may cover something else as well as negligence. If it is too wide, it will be presumed to cover the other thing, NOT negligence. If it only covers negligence, it will be presumed to cover negligence. |
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Term
| Aldersade v Hendon Laundry [1945] |
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Definition
IF THE EC CANNOT COVER FOR ANYTHING OTHER THAN NEGLIGENCE, IT WILL BE TAKEN TO COVER NEGLIGENCE
THE ONLY OPTION WAS NEGLIGENCE - THEREFORE, = NEGLIGENCE.
THE ONLY WAY SOMETHING IN A LAUNDRY COULD BE LOST WOULD BE THROUGH NEGLIGENCE - THEREFORE, THE CLAUSE CLEARLY REFERS TO NEGLIGENCE
(case in which launderette lost handkerchief)
Clause = 'no liability for loss or damage'.
As, the only way in which something could be lost (and it be the proferens fault) would be through negligence, the EC could only possibly cover for negligence. How else would something go missing from a laundrette & it be the laundrette's fault? If the laundrette was robbed, through no fault of the proferens, you wouldn't be able to sue the proferens, the proferens would never under English law be liable. You cannot say that the clause covers for breach of the contractual duty to take care of the goods, as breach of the duty to take care would be negligence. Therefore, in any shape or form, the EC can ONLY cover for negligence. |
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Term
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Definition
IF THE EC COULD POSSIBLY COVER SOMETHING AS WELL AS NEGLIGENCE, IT WILL BE TAKEN TO COVER THAT OTHER THING, NOT NEGLIGENCE
(case in which guy bought bike & bike's seat was negligently fitted)
Clause = no liability for injury.
Potentially, the proferens could provide a bike which was not reasonably fit for puyrpose WITHOUT being negligent…
Therefore, the EC covered him for breach of the contractual duty to provide a bike which was fit for purpose, NOT negligence. |
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Term
| What must you remember to do when considering a contract for supply of goods or services? |
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Definition
Are there any implied terms?
E.g. SGSA s13 = reasonable care and skill
Title, description, fit for purpose? |
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