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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 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.

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.