Exemption Clauses

Question 1

Which statute regulates exemption clauses?

Answer 1

UCTA 1977

Question 2

Aim when drafting exemption clauses

Answer 2

Does the clause, as drafted, cover the alleged breach(es) and resulting loss?

Question 3

Contra proferentem rule

Answer 3

when a contract term is ambiguous, the meaning should be interpreted against the interests of the party who wrote it

Question 4

When will the courts apply the contra proferentem rule with less rigour?

Answer 4

where the clause in question merely limits (rather than excludes) liability

Question 5

The court is less likely to read a clause contra-proferentem in a contract between

Answer 5

commercial parties of equal bargaining power

Question 6

What is the Canada Steamship test useful for?

Answer 6

The Canada Steamship test helps to determine whether an exemption clause should be interpreted as excluding liability for negligence, particularly when the clause is more ambiguous - clear wording must be used

Question 7

When are Canada Steamship test and contra-proferentem rule less helpful?

Answer 7

in commercial cases where parties have equal bargaining power

Question 8

B2B legislation for exemption clauses

Answer 8

UCTA 1977

Question 9

B2C legislation for exemption clauses

Answer 9

CRA 2015

Question 10

When considering whether a party can rely on an exemption clause, you need to consider which 3 points?

Answer 10

Incorporation
Construction - does the clause cover the breach and loss?
Statutory controls - CRA or UCTA

Question 11

Any contractual term limiting liability for loss (other than death or PI) resulting from negligence in B2B contracts (UCTA) is

Answer 11

valid if reasonable

Question 12

Any attempt to exclude or restrict liability for death or personal injury resulting from negligence will be

Answer 12

void

Question 13

If the wording is clear, you should analyse

Answer 13

the ordinary and natural meaning of the words

Question 14

Requirement of reasonableness is judged at what time?

Answer 14

the time the contract was made

Question 15

To pass the UCTA reasonableness test, the term that purports to exclude liability must be

Answer 15

fair and reasonable having regard to all the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made

Question 16

Factors that suggest a clause is reasonable

Answer 16

• equal bargaining power;
• the customer received an inducement to agree;
• whether the customer knew or ought to have known of the existence of the term

Question 17

what is reasonable is an issue of

Answer 17

fact

Question 18

Under CRA 2015, a term is unfair if it creates a significant

Answer 18

imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer

Question 19

when is unfairness judged?

Answer 19

at the time the contract is entered into

Question 20

If a party wants to exclude their liability in negligence, the most certain way to achieve this is by

Answer 20

using the word negligence or a close synonym for negligence

Question 21

Which Sale of Goods Act 1979 implied undertaking cannot be excluded?

Answer 21

the implied undertaking as to title (the seller’s right to the goods)