Scribd
Upload
18 views1 page

Types of Exclusion Clauses Explained

There are three main types of exclusion clauses: 1) True exclusion clauses, which recognize potential breaches of contract but excuse liability. 2) Limitation clauses, which place a limit on the amount that can be claimed for a breach, regardless of actual loss. 3) Time limitation clauses, which state an action must be commenced within a certain period or the cause of action is extinguished. Exclusion clauses must be incorporated into the contract to be valid. There are three methods of incorporation: signature, notice, and previous course of dealings. Signature means the clause is written on a signed document. Notice means reasonable steps were taken to draw attention to the clause. Previous dealings means terms were regularly and consistently

Uploaded by

Thiện Nguyễn
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
18 views1 page

Types of Exclusion Clauses Explained

There are three main types of exclusion clauses: 1) True exclusion clauses, which recognize potential breaches of contract but excuse liability. 2) Limitation clauses, which place a limit on the amount that can be claimed for a breach, regardless of actual loss. 3) Time limitation clauses, which state an action must be commenced within a certain period or the cause of action is extinguished. Exclusion clauses must be incorporated into the contract to be valid. There are three methods of incorporation: signature, notice, and previous course of dealings. Signature means the clause is written on a signed document. Notice means reasonable steps were taken to draw attention to the clause. Previous dealings means terms were regularly and consistently

Uploaded by

Thiện Nguyễn
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Appendix 2

Types of Exclusion Clause True exclusion clause: The clause recognises a potential breach of contract, and then excuses liability for the breach. Alternatively, the clause is constructed in such a way it only includes reasonable care to perform duties on one of the parties. Limitation clause: The clause places a limit on the amount that can be claimed for a breach of contract, regardless of the actual loss. Time limitation: The clause states that an action for a claim must be commenced within a certain period of time or the cause of action becomes extinguished.

Term Must be Incorporated The courts have traditionally held that exclusion clauses only operate if they are actually part of the contract. There seem to be three methods of incorporation: Incorporation by signature: according to L'Estrange v Graucob,[1] if the clause is written on a document which has been signed by all parties, then it is part of the contract. If a document has not been signed, any exception clause which it contains will only be incorporated if the party relying on the clause (the 'proferens') can show that he took reasonable steps to bring it to the attention of the other party before the contract was made. In somewhat of a contradiction, that is not to say that the proferens actually has to show that the other person read the clause or understood it (except where the clause is particularly unusual or onerous). It is not even necessary to show that the attention of that particular person was actually drawn to it. It is somewhat like the 'reasonable man' test in tort: the party trying to rely on the clause needs to take reasonable steps to bring it to the attention of the reasonable person. Incorporation by notice: the general rule, as provided in Parker v SE Railway is that an exclusion clause will have been incorporated into the contract if the person relying on it took reasonable steps to draw it to the other parties' attention. Thornton v. Shoe Lane Parking seems to indicate that the wider the clause, the more the party relying on it will have had to have done to bring it to the other parties' attention. The notice must be given before formation of the contract as illustrated in Olley v Marlborough. Incorporation by previous course of dealings: according to McCutcheon v David MacBrayne Ltd, terms (including exclusion clauses) may be incorporated into a contract if course of dealings between the parties were "regular and consistent". What this means usually depends on the facts, however, the courts have indicated that equality of bargaining power between the parties may be taken into account.

[Link]

You might also like