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Chapter

Cover Equity & Trusts

16. Liability for Breach  

Paul S Davies and Graham Virgo

All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing able students with a stand-alone resource. This chapter discusses the nature of breach of trust and how a trustee can be personally liable for such a breach. Trustees may seek to escape liability by relying on an exclusion clause in the trust instrument. Such clauses might exclude certain duties owed by the trustees or exempt the trustees from liability for a breach of trust. The liability of trustees for a breach of trust is joint and several: a beneficiary may sue only one trustee for all the loss suffered. That trustee may then seek contribution from others who are responsible for the same damage. In some cases, the court might excuse a breach of trust where trustees have acted honestly, reasonably, and where it is fair to do so.

Chapter

Cover Business Law

8. Terms of a Contract  

This chapter focuses on the terms or details of a contractual agreement, and considers the implications of what the parties intend to include in the agreement, what they did not mean to be included in the contract, and what significance different terms may have in the contract. It distinguishes between the terms of a contract and representations, and considers whether, when a term has been identified as such, it is a ‘condition’ or a ‘warranty’. The chapter then studies how terms are implied into the contract and how this affects terms that have been expressed. It concludes by examining how parties may seek to exclude or limit a legal responsibility through the incorporation of an exclusion clause.

Chapter

Cover Contract Law

13. Exclusion Clauses  

This chapter discusses one particular type of boilerplate clause, namely the exclusion or limitation clause. The chapter examines the role and function of exclusion and limitation clauses in modern commercial contracts. In order to perform its function an exclusion or limitation clause must (i) be validly incorporated into the contract, (ii) cover the loss that has been suffered, and (iii) survive scrutiny under the Unfair Contract Terms Act 1977. Difficult interpretative issues can arise where one party seeks to exclude liability in respect of its own negligence or exclude liability for fundamental breach. The Unfair Contract Terms Act 1977 applies a reasonableness test to a number of exclusion or limitation clauses. The 1977 Act is also examined, with particular reference to the types of clause that fall within its scope.

Chapter

Cover Card & James' Business Law

9. Unfair terms  

This chapter examines unfair terms and exclusion clauses in a contract. It explains that exclusion and limitation clauses can be used by the parties to exclude or limit their liability and that they are regulated by statute and common law. It highlights the fact that an exclusion clause can only be effective if it is incorporated into a contract and if it was brought to the other party’s attention prior to the contract being formed. This chapter also discusses the relevant provisions of the Unfair Contract Terms Act 1977 and the Consumer Rights Act 2015, and ongoing efforts to clarify the law in this area.

Chapter

Cover Commercial Law Concentrate

5. Exclusion and limitation clauses  

Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter, which focuses on clauses designed to exclude or limit a party’s liability, first considers exclusion or limitation clauses in the UK under common law rules, the Unfair Contract Terms Act 1977, and the Consumer Rights Act 2015. It explains the distinction between an exclusion clause and a limitation clause before discussing the two main methods of controlling exclusion clauses adopted by the courts. The chapter examines the exclusion or restriction of the statutory implied terms under the Sale of Goods Act 1979, the Supply of Goods (Implied Terms) Act 1973, and the Supply of Goods and Services Act 1982. Finally, it considers the rules introduced by the Consumer Rights Act 2015 in relation to consumer transactions.

Chapter

Cover Casebook on Tort Law

9. Defences to negligence  

This chapter considers three defences. It begins with a discussion of the principle of contributory negligence. It presents cases showing that the rules for establishing contributory negligence on the part of the claimant are not the same as the rules for establishing liability for negligence on the part of the defendant. It then turns to voluntary assumption of the risk or consent (sometimes referred to as volenti non fit injuria) which provides a complete defence to an action. The defence is based on the view that a person cannot sue if he consents to the risk of damage. Finally, the chapter considers the defence of illegality, which arises when the tortious action is in the context of the claimant’s and/or defendant’s participation in an unlawful act.

Chapter

Cover Essential Cases: Equity & Trusts

Armitage v Nurse [1998] Ch 241, Court of Appeal  

Essential Cases: Equity & Trusts provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in Armitage v Nurse [1998] Ch 241, Court of Appeal. The document also includes supporting commentary from author Derek Whayman.

Chapter

Cover Essential Cases: Equity & Trusts

Armitage v Nurse [1998] Ch 241, Court of Appeal  

Essential Cases: Equity & Trusts provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in Armitage v Nurse [1998] Ch 241, Court of Appeal. The document also includes supporting commentary from author Derek Whayman.

Chapter

Cover Contract Law

13. Controlling contract terms  

Exclusion clauses, penalties, and consumer protection

This chapter examines how the law regulates contract terms, with particular emphasis on rules that are intended to protect weaker parties. It begins with a discussion of the limits of freedom of contract and proceeds by assessing the role played by formal requirements, such as the requirement that contracts be in writing. It then considers how the law regulates contract terms which seek to alter the liability that one party will have in the event of breach. More specifically, it looks at exclusion clauses in the common law and the statutory regulation of such clauses, along with liquidated damages, contractual remedies, and the rule against penalties. It also explores the extent to which consumer protection law restricts the terms that can be included in consumer contracts, especially when dealing with the problem of unfair terms.

Chapter

Cover Contract Law

11. Direct control over terms  

This chapter examines direct legal controls over the contents of contracts, with particular emphasis on the Unfair Contract Terms Act 1977 (UCTA) and the Consumer Rights Act 2015 (CRA). The pattern of control under UCTA and CRA is discussed, compared, and contrasted in terms of: the types of contracts covered; the parties who can benefit from, or be detrimentally affected by, the contract; the types of terms subject to control; the control mechanisms such as of outright invalidity and a test of reasonableness or fairness; and the enforcement mechanism, whether by the individual complainant or by a statutory body. Other statutory and common law controls of terms are also briefly discussed, as is the question of whether control of substantive unfairness by contract law can be justified.

Book

Cover Contract Law
Contract Law: Text, Cases, and Materials provides a complete guide to the subject of contract law. The book comprises a balance of 60 per cent text to 40 per cent cases and materials. Its clear explanations and analyses of the law provide support to students, while the extracts from cases and materials promote the development of essential case reading skills and allow for a more detailed appreciation of the practical workings of the law and of the best legal scholarship. Part I of the book examines the rules relating to the existence of an agreement (particularly offer and acceptance, uncertain and incomplete agreements, and consideration and promissory estoppel). Part II covers the terms of the contract, including implied terms, interpretation, boilerplate clauses, exclusion clauses, unfair terms in consumer contracts, and good faith. Part III examines topics such as mistake, misrepresentation, duress, undue influence, unconscionability, inequality of bargaining power, and frustration and force majeure. Part IV turns to breaches of contract and termination, damages, and specific performance. The last part, Part V, concentrates on third parties.

Chapter

Cover JC Smith's The Law of Contract

15. Exclusion clauses and unfair terms  

This chapter analyses the law on exclusion clauses and unfair terms. Exclusion clauses are terms which exclude or limit a defendant’s liability. The enactment of the Unfair Contract Terms Act 1977 and the Consumer Rights Act 2015 has reduced the importance of common law techniques for avoiding the worst effects of exclusion clauses. Both statutes enable the courts to control the substance of the contract. The Unfair Contract Terms Act 1977 only applies to non-consumer contracts. It empowers a court not to enforce exclusion clauses where they are unreasonable. Unlike the Unfair Contract Terms Act 1977, the Consumer Rights Act 2015 is not limited to exclusion clauses. A term will be unfair if, ‘contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer’.

Chapter

Cover Poole's Casebook on Contract Law

6. Exemption clauses and unfair contract terms  

Robert Merkin and Séverine Saintier

Poole’s Casebook on Contract Law provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. This chapter deals with exemption clauses and unfair contract terms. An exemption clause is a term in a contract or notice that can be either an exclusion clause (excluding liability or remedies) or a limitation clause (limiting liability to a specified sum). The chapter primarily focuses on the requirements that must be satisfied before an exemption clause can be relied upon, the question of construction and the natural and ordinary meaning of the clause, contra proferentem, liability for negligence, limitation clauses, inconsistent terms, and fundamental breach. It then examines the legislative regulation of exemption clauses, emphasizing the growing distinction between commercial and consumer contracts in this context. It considers in some depth the enforceability of exemption clauses in a B2B context in accordance with the Unfair Contract Terms Act 1977 and its interpretation in case law. In the B2C context, it discusses control of unfair terms in accordance with Part 2 of the Consumer Rights Act 2015 and the case law interpreting the previous legislative regulation of unfair terms.

Chapter

Cover Business Law

9. Statutory regulation of contracts  

This chapter studies the features of legally binding contracts by examining the manner in which the terms of a contract are regulated through statutory intervention. Such legislative measures have come about as a response to the unequal bargaining positions of consumers as contracting parties in business contracts, and the idea that laissez-faire can be contrary to public policy and fairness, for example with certain exclusion clauses. Some examples include statutes such as the Consumer Rights Act 2015 and the Sale of Goods Act 1979 that imply terms into contracts, and the Unfair Contract Terms Act 1977 that regulates the parties’ use of exclusion clauses. This protects the weaker party to a contract from exploitation and provides minimum rights that may not be waived.

Chapter

Cover Poole's Casebook on Contract Law

6. Exemption clauses and unfair contract terms  

Robert Merkin KC, Séverine Saintier, and Jill Poole

Poole’s Casebook on Contract Law provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. This chapter deals with exemption clauses and unfair contract terms. An exemption clause is a term in a contract or notice that can be either an exclusion clause (excluding liability or remedies) or a limitation clause (limiting liability to a specified sum). The chapter primarily focuses on the requirements that must be satisfied before an exemption clause can be relied upon, the question of construction and the natural and ordinary meaning of the clause, contra proferentem, liability for negligence, limitation clauses, inconsistent terms, and fundamental breach. It then examines the legislative regulation of exemption clauses, emphasizing the growing distinction between commercial and consumer contracts in this context. It considers in some depth the enforceability of exemption clauses in a B2B context in accordance with the Unfair Contract Terms Act 1977 and its interpretation in case law. In the B2C context, it discusses control of unfair terms in accordance with Part 2 of the Consumer Rights Act 2015 and the case law interpreting the previous legislative regulation of unfair terms.