Exclusion clauses and unfair terms
Video titled: Video 15.1

Transcript Area

Chapter fifteen deals with exclusion clauses and the control of unfair terms. And I thought it would be helpful just to use the slides to show you how the different elements of the chapter fit together. Just to give some sort of overview about where we're going. And so, the first question, if you're analysing any sorts of claim is, what is the cause of action? So, in this course it's often going to be breach of contract, but it could be in the tort of negligence, for example, as well. And then typically, we're going to look for whether or not there's an exclusion clause. And the first question is whether or not the clause has been incorporated into the contract, which we've already looked at in chapter eleven. But of course, it's important for an exclusion clause, because if the clause hasn't been incorporated into the contract then it's difficult to see how it can be relied upon. So that's a common law doctrine. And then the next question is one of interpretation. So, if the clause has been incorporated into the contract, does the cause cover the claimant issue? Is it relevant to the cause of action we're looking at? Also, the loss that's claimed, for example. And again, that's a question of interpretation, and we looked at  questions of interpretation generally in chapter twelve, and in this chapter consider how they might apply in the particular context of exclusion clauses. But all those doctrines are common law doctrines. Now, we also have two statutes which you need to consider. We have the Unfair Contract Terms Act 1977, and we have the Consumer Rights Act of 2015. So, in particular, before UCTA came into force, the common law rules, the first three boxes on these slides were of crucial importance. Whereas now I think they're still obviously important, but even if we have an exclusion clause, which has been incorporated into the contract and which does cover the claim we're looking at, then we still might, or the courts still might be able to say that a party shouldn't  be able to rely upon an exclusion clause, as a result of one of these two statutory regimes. And broadly the Consumer Rights Act, as the name suggests, involves consumers, consumers dealing with traders. Whereas the Unfair Contract Terms Act deals with commercial contracts. So particularly business to business contracts. If you think about the unfair contract terms at first, there were two major types of terms, right? So, some terms are such that The Act will say a party cannot rely upon that exclusion clause regardless. And a good example is section two subsection one, which purports to, so the term which purports to exclude liability for personal injury or death simply cannot be relied upon by dependence. Whereas most of the clauses, most of the exemption clauses a party might be able to rely upon if it satisfies a test of reasonableness, and reasonableness is assessed at the time the contract was made. So not with the benefit of hindsight. And similarly, if you're looking at the Consumer Rights Act, then most terms are subject to a test of fairness, but some terms will not be subject to such a test of fairness as a result of Section 64. And in particular, if the  term is to do with the main subject matter of the contract, or the price of the contract, and if that term is transparent, prominent, and in plain and intelligible language then a party won't be able to challenge it for unfairness. And that's because the consumer won't be surprised by that sort of term. It's the major terms of the contract. So, this is a sort of overview, I think, of the chapter, and the sort of structure that you might have in your heads. But of course, all these boxes raise their own difficulties and that's what the chapter tries to deal with.