Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
39 Cards in this Set
- Front
- Back
Exclusion clauses |
Courts cannot strike them down, though Lord Denning has tried |
|
Interpretation following UCTA 1977 |
No more need for strained language, Lord Bingham, George Mitchell v Finney Lock Seeds |
|
Approach to exclusion clauses 2
|
1 Restrictive approach to incorporation by notice 2 Interpretation contra proferentem |
|
Exclusion of liability for negligence 6 |
1 Aggressive principles of interpretation 2 Canada Steamship Lines v The King 3 Lord Morton: courts must give effect to express language 4 If there is doubt, it must be interpreted contra proferentem 5 If it might exclude other forms of liability, it should be interpreted that way 6 In the case, the clause was interpreted to exclude strict liability but not negligent liability |
|
Canada Steamship rules in practice 3 |
1 Hollier v Rambler Motors 2 Clause excluding fire damage taken only to mean strict liability, not negligence 3 As a non-lawyer would think there was liability without negligence |
|
Post-1977 case 6 |
1 George Finney v Finney Lock Seeds 2 Lord Denning MR's final judgement (upheld by House of Lords) 3 He noted the 'bleak winter' of exclusion clauses 4 The 'gymnastic contortions' needed to get round them 5 Following the UCTA, the 'idol of 'freedom of contract' was shattered 6 The clause here - excluding liability up to £200 in £600,000 case - was struck down |
|
Post-1977 second case 3 |
1 Bank of Credit and Commerce International v Ali 2 Lord Hoffmann: no need to use artificial rules of construction, with ICS approach 3 In that case, he dissented, arguing a clause should be given natural meaning as the draftsman meant business |
|
Post-1977 third case 2 |
1 The Tychy (No 2) 2 Lord Phillips MR: 'a little intellectual hand luggage is no bad thing when construing a contract' |
|
Current status of Canada Steamship 2 |
1 HIH Casualty and General Insurance v Chase Manhattan Bank 2 Rules not overruled, but guidelines, not too rigidly applied |
|
Doctrine of fundamental breach |
Rule of law that no term could exclude liability for a breach of a fundamental term |
|
Status of the doctrine of fundamental breach |
1Overruled in Photo Production v Securicor 2 Clause excluding liability for injurious acts by employees was clear and upheld 3 Lord Wilberforce: no place for doctrine after UCTA 4 Beyond the Act, parties can apportion risk as they please 5 Lord Denning agreed extra-judicially in The Family Story |
|
Limitation clauses not interpreted as strictly |
1Alisha Craig Fishing v Malvern Fishing 2 Lord Wilbeforce: not the same 'hostility' |
|
Exclusion of fraud |
1 Impossible at common law 2 HIH Casualty Insurance and General Insurance v Chase Manhattan Bank |
|
First statutory striking down of exclusion clauses |
Misrepresentation Act 1967, Section 3 |
|
Exceptions to UCTA 1977 2 |
1. Schedule 1 2 Contracts uberrimae fidei and sale of land etc |
|
Main sections apply to |
Business liability (1(3)) |
|
UCTA tackles (3) |
1 Clauses restricting liability for negligence 2 Clauses in consumer and standard form contracts restricting liability for breach 3 Clauses which restrict liability for breach of terms implied by statute |
|
A term covered by the act... |
1 Will be ineffective 2 Or will be subject to a test of reasonableness |
|
Definition of a consumer 2 |
12(1): course of business (consumers receive more protection) 2 To count as business, must be integral part of buyer's business |
|
Invalidated terms 2 |
2(1) - personal injury or death 6(2) and 7(2) - defective products to consumers (to stop people excluding Sale of Goods Act liability) |
|
Terms subject to reasonableness |
2(2) - harm other than personal injury 6(3) and 7(3) - defective products to non-consumers |
|
Standard terms of business 2 |
Section 3: reasonableness test seeking to limit liability for breach under standard terms 2 May still apply to business-business if on one's standard terms |
|
Authority for standard terms of business 3 |
1 Watford Electronics v Sanderson CGL 2 Test of fact and degree 3 Some minor negotiations still makes them standard terms |
|
Test of reasonableness 2 |
11(1) Schedule 2 - factors to consider |
|
Factors under Schedule 2 (4)
|
1 Relative bargaining power 2 Clarity 3 Insurance 4 Relationship between loss and limitation |
|
Authority for reasonableness 3 |
1 Watford Electronics v Sanderson CGL 2 On standard terms, section 3 3 Upheld - importance of equal bargaining power, two businesses |
|
Exclusion clauses unreasonable 6 |
1 George Finney v Finney Lock Seeds - struck down because no negotiation 2 St Albans City Council v International Computers 3 limitation clause struck down because D huge company 4£50 mil liability insurance 5 limited choice 6 otherwise loss borne by the public |
|
Unfair Terms in Consumer Contract Regulations 1999 |
1 EU directive to harmonise rules 2 German delegation wanted to focus on unfair surprise 3 Law Commission has sought unification with UCTA 1977 |
|
UTCCR unfair terms are 3 |
5(1): terms which cause a significant imbalance in rights and obligations 5(1) contrary to good faith Schedule 2: grey list |
|
Does not apply to... 2 |
6(2): core terms of the contract including price 2 Lord Mustill has complained extra-judicially that lopping off any term from a contract invalidates / imbalances what is left |
|
UTCCR applies to.. |
4(1): apply tocontracts between seller/supplier and consumer |
|
Definition of a consumer |
Only humans |
|
UTCCR v UCTA 2 |
UTCCR applies to more terms - not just limitation / exclusion clauses - but humans (3(1)) and standard terms only (5(1)) 2 UCTA reasonableness, UTCCR fairness |
|
Theory 3 |
1 Kronman: courts must ensure fair distribution of resources 2 Schwartz: regulating contracts boils down to price control, which courts are not equipped for 3 Regulation overlooks extra-legal factors - journalism etc |
|
Authority for unfairness 3 |
1 Director-General of Fair Trading v First National Bank 2 Good faith is fair and open dealings (procedural and substantive unfairness) 3 Good faith not alien to British lawyers since Lord Mansfield 4 Good standards of morality and practice |
|
Authority for core terms 2 |
1 Office of Fair Trading v Abbey National 2 Unauthorised overdraft charges core terms because part of price |
|
Section 7 |
7(1): requirementof clear language 7(2): contraproferentem rule |
|
Enforcement |
12: Office of Fair Trading can enforce UTCCR |
|
Consumer Rights Act 2015 |
1 Law Commission wanted to clear up discrepancies between UCTA and UTCCR 2 Consumer Rights Act planned to abolish UTCCR and leave UCTA for non-consumer contracts (originally wanted to abolish both) 3 Based on model of rational consumer 4 Test of fairness |