Exclusion and Limitation Clauses

Exclusion Clause

Prevents liability for a breach of contract.

Limitation Clause

Sets an upper limit on liability for breach of contract.

Incorporation by Signature

If a document is signed, the signer agrees to the exclusion clause, regardless of whether they read it.

L’Estrange v Graucoub

Case ruling that signing a document incorporates the terms therein, even if unread.

Curtis v Chemical Cleaning

Case where a claimant was misled about an exclusion clause, allowing them to claim for breach.

Lord Denning’s Red Hand Rule

A rule stating a party must draw attention to any significant terms buried in small print.

Incorporation by Notice

Term must be brought to a party's attention before acceptance of the contract.

Olley v Marlborough Court

Case illustrating that an exclusion clause cannot be agreed to if notified after contract formation.

Chapelton v Barry Council

Case ruling that an exclusion clause on a ticket is invalid if the clause is not known at the time of contract.

McCutcheon v MacBrayne

Case ruling that an exclusion clause was not incorporated due to lack of consistent prior dealings.

Contra Proferentem Rule

If there's doubt about the meaning of an exclusion clause, it is interpreted against the person who introduced it.

Houghton v Trafalgar Insurance

Case illustrating ambiguity in terms allows for interpretation against the introducing party.

Unfair Contract Terms Act 1977

An act that prohibits exclusion of liability for negligence causing death or personal injury in business contracts.

s2(1) of the Unfair Contract Terms Act 1977

States that businesses cannot exclude liability for negligently causing death or personal injury.

Consumer Rights Act 2015

An act that provides statutory controls over unfair contractual terms, especially for consumers.