Exclusion Clauses AO3

Statutory controls

s.9 CRA 2015 “satisfactory quality”

  • Parliament’s intention when implying a term is to protect the weaker party, who is known as a “consumer” - an individual who is acting for purposes wholly or mainly outside his trade, business etc.

  • Statutory implied term seen in s.9 Consumer Rights Act 2015- “must be of satisfactory quality” → meaning goods must meet standards of what a reasonable person would consider satisfactory

  • → This allows a good standard of quality and protects consumers from getting poor quality

  • → However, statutory implied terms interfere with the freedom of contract drastically, as it ignores the business’s terms, even if the term is to take advantage over the weaker party, this means businesses can no longer create contracts without Parliament’s approval → unfair

Statutory Implied terms overview

  • Uncertainty around statutory implied terms raises a risk to contracts being repudiated too easily, due to trivial errors being broken in a term

  • Re Moore- there was the correct amount of peaches, but they were packaged slightly different to the terms agreed, which was held to be in breach of s.11 CRA 2015 - “as described”

  • → This breach allowed CLMT to end the contract, which can be seen as unfair as it was an insignificant error, this creates uncertainty in contracts

  • However, CRA 2015 only applies to consumers- trader contracts, meaning private sale contracts are allowed to have a greater freedom of contracts

  • However, this means they have less protection, showing how statutory implied terms are restricted

Remedies for breach of s.9, s.10, s.11 is s.20 and s.23 and s.24

Common law exclusion clause incorporation

Incorporation by Signature

  • Terms are binding if they are signed

  • L’estrange V Gracuab- C signed a contract without reading it, the contract had a small print clause excluding liability for faults in the machine, when the machine didn’t work properly, she tried to claim damages. She was unable to claim as she had signed the contract which included the exclusion clause

  • Fair as it promotes certainty, and promotes a standard that people should read contracts carefully before signing them

  • However, unfair if a party didn’t read the terms (can lead to harsh results).

  • However, if C was lied to, it will not apply Curtis V Chemical Cleaning- C thought she signed for exclusion only for damage to beads, but it was actually all damage

  • Lord Denning's red hand rule also applies, harsh terms need to be clear → Interfoto V Stilleto- Charge per photo was seen as harsh

Incorporation by Notice

  • Terms must be reasonably brought to the attention of the other party before or at contract formation

  • Olley V Marlborough Court- Notice was not reasonable as it was seen in the hotel room after C had paid, Notice said no liability for stolen property and C’s jackets were stolen

  • Protect parties who are in a contract but were properly/ reasonably informed.

  • What counts as “reasonable notice” can be unclear→ Seen in Thompson V LMS Railway → C was illiterate, but the ticket being a reasonable notice was still seen as a notice

  • However it is reasonable to assume most people can read, and a line has to be drawn some where for what is a sufficient notice