Exemption Clauses in Contract Law What is an Exemption Clause? An exemption clause is an agreement in a contract that stipulates that a party is limited or excluded from liability. Exemption clauses can be used unfairly which may disadvantage a party. Therefore, there have been changes to the law to create more fairness and to limit the use of.
Exclusion is a clause that releases the party that breaches the contract from all liability. Limitation is a clause that predefines the liability and limits it significantly. Altogether the function of exemption clauses defines the penalties and risk to signing the contract as well as providing a general aid to business planning and non-legal risk planning.
The Law Commission has recommended that both pieces of legislation are merged into a new single statute (Law Commission Report on Unfair Terms in Contracts, Law Com. No. 292, (2005)). They also produced a draft Bill that unifies the law on unfair contract terms and exemption clauses.
Exclusion Clauses Essays Business Law Word Count: 1950 Exclusion Clauses Essay Exemption clauses are an agreement in a contract which helps the party to have limited or to exclude liability. It can be used unfairly which makes it a disadvantage to other partys which is why there are laws in place to limit the use of clauses and to make it fair.
In this essay, exclusion clauses can be defined as a clause included in a contract to either limit or exclude liability of a party in breach of the agreement. (also termed exemption clauses or exemption clauses.) Consequently, it is argued that whether the party will be bound by the exemption clause which is signed by the parties or not.
Common law control of exclusion clauses: rules relating to incorporation; brief understanding of the rules relating to construction. Statutory control of exclusion clauses: Unfair Contract Terms Act 1977 (s2 and s3); Consumer Rights Act 2015 (s31, s57 and s65). Vitiating factors. Misrepresentation (nature, types and remedies). Economic duress (definition and remedies). Discharge of a contract.
As such, the exclusion clause was not incorporated into the contract, prior to the completion of the contract. Hence it is invalid. In Thornton v Shoe Lane Parking, the court rejected the exclusion clause, and ruled that printing the exclusion clause on the reverse of the ticket constituted insufficient notice to customers7. Due to the gross negligence of English Rail’s staff, Maggie.
Preview text Common Law Control of Exemption Clauses In order for an exclusion clause to be valid at common law it must satisfy three tests: 1. It must be an incorporated term of the contract 2. It must cover the damage that was caused 3.