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.
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Armitage v Nurse [1998] Ch 241, Court of Appeal
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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.
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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’.
Book
Ewan McKendrick
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.
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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.
Book
Ewan McKendrick
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.
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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.
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10. Duties of the parties
This chapter details the duties of the parties as part of a contract sale according to the Sale of Goods Act 1979 (SGA). Section 27 of the SGA does not contain a complete statement of the parties' duties, but Section 28 does define the relationship between the duties of seller and buyer. Each party's duty to perform is conditional on the readiness and willingness of the other to perform and commercial agreements normally provide for the goods to be delivered on credit terms so that payment is due after delivery. SGA's Section 27 indicates that the duties of parties revolve around delivery, acceptance, and payment in accordance with the terms of the contract. The chapter then analyses the notion of exclusion clauses.
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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.
