1 BULAW5914 Commercial Law – Assignment Information about the Assignment:. Ho. Topics covered by Assignment Topic C Maximum word limit 3000 words Total marks 30 Percentage of final grade 30...

BULAW5914 Commercial Law
Question 1.
1. Exclusion Clause:
In the event of default, It is common in the distribution of risk in a contract to exclude or limit party’s responsibilities. There may be a number of forms of this exclusion. Certain provisions are aimed at excluding liability. Others put a liability restriction, maybe by capping the damages payable in the event of an offense, by limiting the types of losses reclaimable or available remedies, or by applying a short claim deadline.
The general principle of contractual freedom must be balanced with public policies that do not give equal discretion to a party which is freely engaged in a binding contractual obligation to execute its obligation. English law has established a mix of statutory rules and jurisprudence to help strike this balance, which must be considered when negotiating or revising these clauses.
2. Requirements:
2.1 Incorporation:
An exclusion or restriction clause can only be enforced if it has been incorporated into the contract concerned. If reasonably and fairly brought to the attention of the other party, the standard terms of a party shall be incorporated. Even if a 'fight of forms' has been won, if a party trade an unusual or unclear exclusion clause in its standard terms, it may fail to give the other party sufficient prominence to inform them. The unusual the clause, the more important it is.
2.2 Contra proferentum:
If a contract term is uncertain and ambiguous, the “contra proferentum” rule is that the term must be interpreted in contradiction to the Party trying to apply the clause. This means that the exclusion clause would be invalid under the exclusion clause. (Houghton v Trafalgar Insurance Co. [1954] 1 QB 247. Ltd.)
3. Statutory controls:
3.1 The Unfair Contract Terms Act 1977 ("UCTA"):
UCTA is the most important statutory control in this field for commercial situations. In the case of a breach of express and implied obligations of contract and of common law duty of care (i.e. tort), the UCTA regulates the exclusion and limitation of responsibility. In the area of responsibility which UCTA aims to exclude or restrict, it regulates terms. The following areas are considered. Some contract types are outside the scope of UCTA
3.2 Consumer Rights Act 2015 ("CRA"):
“From 1 October 2015”, the CRA shall cover all unfair terms in the UCTA and Unfair Terms in consumer contracts 1999 contracts previously covered. It deals with the implied qualities of goods and services and regulates the efforts of a trader to exclude his liability for infringements. This includes digital content. A "fairness" test was also introduced by the CRA. Any term which in the positions of the parties, to the benefit of the consumer and contrary to the requirements of good faith, causes "a significant imbalance" is seen as 'unfair.'
An unfair term does not bind the consumer and may be treated by the consumer as being excluded from the contract. The rest of the contract will be concluded if it is able to do so under the traditional severability principles.
4. Limitations of exclusion clauses:
4.1 Misrepresentation and fraud:
If the person trying to rely on that clause had induced the other party into the contract by misrepresenting the effect of the clause, the exclusion clause will not be operable and can be relied upon. (“Curtis v Chemical Cleaning and Dyeing Co [1951] 1 KB 805”)
4.2 Breach or non-performance of contract:
“Section 3 of the “UCTA” prevent the use of an excluding provision that
(a) excludes liability for breache;
(b) allows for contractual performance that is significantly different from expected;
(c) allows for non-performance of claims for the full or part of the contractual obligation (i.e. if a precedent condition is not met), unless a contractual obligation is fulfilled.
This rule is applicable where one party contracts under the other standard written terms. This rule applies. "Written standards" are more widely interpreted than expected and may be able to enter into negotiated ex-standard contracts
Contracts usually include force majeure clauses that relieve parties of all responsibility when it becomes unlikely for them to conduct unforeseeable events. Such clauses may in principle have the same effect as exclusive clauses and may, under the provisions of Section 3 of UCTA, be subject to a reason test. Although force-based clauses are generally considered reasonable, they can raise problems if extraordinarily broad proposals are drafted to deal with issues such as higher cost or events under the supervision of the parties.
5. Case
5.1 “Chapelton v Barry Urban District Council [1940] 1 KB 532”
5.1.1 Facts
Chapelton wished to hire a deck chair and approached the Barry Urban District Council (BUDC) stack of chairs. The cost of hiring is described in a notification next to the churches and the customers are advised to obtain tickets for inspection. Tickets Chapelton bought and put into his pocket. The Council allegedly excluded responsibility on one side of the tickets for any accidents caused by the hiring of chairs. Sitting and giving way to the canvas, Chapelton sat. He requested damages from BUDC and was held liable for them. Appealed by Chapelton.
5.1.2 Issues
Chapelton claimed that inadequate notice was given to the conditions written on the ticket and that he would not be bound by them. The clauses in the back of the note adjacent to the stalls or tickets facing the customers were not told. The ticket will be considered a receipt after the contract has been concluded. Chapelton got a note from BUDC because of the clause of exclusion clearly imprinted on the fare. The message next to the deck chairs was just an invitation to service. The ticket wasn't just a receipt, but a written document outlining how the parties agreed to become bound..
5.1.3 Held
The appeal of Chapelton has been successful. The ticket was held to be an acknowledgment. BUDC's hiring chair was subject to the terms and conditions of the notice and no exclusion clause was included in the notice. Therefore, BUDC did not and could not depend on Chapelton's clause.
5.2 “Houghton v Trafalgar Insurance Co. Ltd [1954] 1 QB 247”
5.2.1 Facts
The applicant (the defendant is the insurer) and the defendant had entered into an insurance contract. The contract included an exemption clause, stating that when the claimant's vehicle was overloaded during the accident the defendant is not liable to pay. As regards 'loss, damages or liability caused, or arising during the transmission of car loads that are beyond that for which the car was constructed,' it was the specific wording of the exemption clause that was excluded. The plaintiff was affected by a car crash and tried to claim his policy. There were six people in the vehicle at the time of the accident. The car was only designed for 5.
5.2.2 Issues
The bigger point is the meaning of the term "load" in the clause of exclusion and how many passengers it...