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Exemption Clauses 2 Statutory Notes

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A more recent version of these Exemption Clauses 2 Statutory notes – written by Cambridge/Bpp/College Of Law students – is available here.

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Contract Law: Exemption clauses 2, Statutory Controls Recap: Contents of a Contract

* Express terms

* Implied terms SGA 1979 or SGSA 1982 (B2B contract) /terms under CRA 2015 (B2C contract)

* Classification (condition/warranty/innominate)

* Breach and effects

* Has an exemption clause been incorporated? (will court allow it to remain in the contract).

* Does the exemption clause cover the breach?

* What does UCTA 1977 say about the EC?

* What does CRA 2015 say about the EC (briefly)

B2B---Unfair Contract Terms Act (UCTA) 1977 Purpose of UCTA o Preamble: 'to impose further limits on the extent to which . . . liability for breach of contract, or for negligence or other breach of duty, can be avoided by means of contract terms and otherwise . . . ' o Does this by provisions that ensure: o (1) certain types of exemption clauses have no effect o (2) other types of ex clause are effectively only so far as they satisfy the requirements of reasonableness. Scope of the act
? Given its name, might be assumed that UCTA applies to all 'unfair' terms---actually,
? Only deals with exemption clauses (eg penalty clauses are not in UCTA).
? Exemption clauses = exclusion or limitation clauses.
? UCT A deals with B2B only---only to 'business liability'.
? S1(3), 'business liability= liability for breach of obligations or duties arising: o A) from things done or to be done by a person in the course of a business (whether his own business or another's); OR o (b) from the occupation of premises used for business purposes of the occupier; and references to liability are to be read accordingly . . . '
? Non-contractual NOTICES also -s2(1). i.e. tortious liability, eg trespassers, occupiers' liability. Not a subject for contract GDL, will come across in tort.
? S10---prohibition on using secondary contracts to evade UCTA
? S13, prevents: o (a) making a liability or its enforcement subject to restrictive or onerous conditions;

1 o (b) excluding or restricting any right or remedy in respect of the liability, or subjecting a person to any prejudice or any consequence of his pursuing any such right or remedy; o (c) excluding or restricting rules of evidence or procedure which would have the effect of circumventing UCTA provisions. Main sections of UCTA
? Following sections deal with exemption clauses exempting liability for: o S2: negligence o S3: breach of contractual term (an express contractual term, written or incorporated into contract). o S6: breach of term implied by SGA or SGSA (Hire purchase). o S13: defines EC (includes a limitation clause (LC)). o S14: defines 'business' (includes local and public authorities). Exemption clauses which have no effect
? Exempting liability for death/PI resulting from negligence (s2(1))
? Exempting liability for breach of statutory implied terms about title to goods (s6(1)): in relation to s21 SGA 1979 (seller's title). Exemption clauses which are effective only so far as they satisfy the requirements of reasonableness
? ?? ? Exempting liability for other loss (not PI/death) resulting from negligence, s2(2)
? ?? ? Exempting liability for breach of statutory implied terms about quality of goods (s6(1A)). : re ss13, 14, 16 SGA.
? ?? ? Exempting liability arising in contract (s3(1)) S2 UCTA-Negligence
? ?? ? Negligence for purpose of UCTA defined in s1(1), includes: o (a) 'breach of any express or implied contract term to take reasonable care or exercise reasonable skill' is negligence. i.e. contractual duties of care--Eg breach of s13 SGSA (implies term of reasonable care and skill). o (b) Any common law duty to take reasonable care or reasonable skill (i.e. tort of negligence, not on GDL contract module). o (c) The common law duty imposed by the Occupiers' Liability Act 1957.
? ?? ? S2 UCTA, is the exemption clause valid?
o If PI/Death--- exemption clause invalid (s2(1)), ex clause has no effect. 2

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