NEEDS FINISHING Terms implied by Statute & Exclusion/ limitation clauses

Consumer Rights Act 2015 & Exclusion and Limitation clauses

CRA 2015 s.9

Goods must be of satisfactory quality

CRA 2015 s10

Goods to be fit for a particular purpose

CRA 2015 s11

Goods to be as described

CRA 2015 s49

Service to be performed with reasonable care and skill

CRA 2015 s52

Service to be performed within a reasonable time

Exclusion clause

• may be inserted into a contract in order to reduce or eliminate the liability of either party where certain events may occur.

• they can operate legitimately where both parties are of equal bargaining power particularly where consumers are involved.

• business’ may seek to take the upper hand and wish to tip the balance of the contract in their favour

Common law regulation of Exclusion Clauses:

Where one party is more dominant, usually business, and seeks to rely on exclusion clauses to the detriment of the other party.

1. the clause must be incorporated into the contract as part of the contract.

2. the clause will be constructed by the courts and must protect the party from damage caused and not seek to gain an undue advantage from it.

Incorporation of Exclusion clauses

the exclusion clause must be brought to the attention of the party before or at the time the contract was formed.

• agreed to what you sign for

• are bound by the exclusion clause, whether or not you’ve read the contract in full- L’Estrange v Graucob

Where the contract is not necessarily signed but the clause should’ve been brought to the other parties notice the EC will only be binding if the parties had express knowledge of it at the time of the contract.

Olley v Marlborough Court Hotel: since the contract was made at the reception desk, the notice in the bedroom was too late to become a term.

Chappelton v Barry

a ticket with an exclusion clause on the reverse is generally unsufficient.

If there is a misrepresentation of the clause it is unlikely to be binding.

General rules for knowledge of the clause:

• Did the party know before and were understood to have such knowledge?

• Were reasonable steps taken to bring the EC to their attention?

Previous Dealings:

• the clause can be incorporated through the parties’ previous dealings. If they have traded before, the clause will be binding on the basis of previous knowledge even if not brough to their attention.

• Hollier v Rambler Motors: previously, the standard form included an exclusion clause excluding liability. On this occasion, standard form had not be signed. CoA stated that standard form was not in the contract, so previous dealings did not apply.

Trade of Custom

• parties are aware that such terms are commonplace and they both trade in similar markets.

Contra proferentum rule

• any ambiguity with regard to the clause must be interpreted against the party proposing or having drafted the clause and wishing to rely upon it

• Hollier v Rambler

• very clear words must be used

Unfair Contract Terms Act 1977

• introduced for greater protection of consumer’s rights.

• section 12 (1) defines dealing as a consumer where:

• a) he neither makes contract in the course of a business

• b) other party does make the contract in course of business

• c) goods are a type ordinarily supplied for private use/ consumption