How may an exclusion clause be incorporated into a contract?

It may be incorporated by signature of a contractual document, by reasonable notice given before or at the time the contract is made, or by a consistent and regular course of dealing between the parties.

State the contra proferentem rule.

Any ambiguity in an exclusion clause is construed against the party seeking to rely on it, since that party drafted the wording and could have made it clear.

What guidance did Canada Steamship Lines v The King (1952) give on excluding liability for negligence?

A clause expressly mentioning negligence will exclude it, and where it does not the court asks whether the words are wide enough to cover negligence and whether the clause could instead operate on some other head of liability, in which case negligence is not covered.

WJEC A-Level Law 603-1978-1

Law Making in Wales and the UK

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Contract: Terms

Exclusion clauses and their construction

3 things to know
A2 Units 3 and 4

Overview

Contra proferentem rule and doctrine of fundamental breach and why was it abandoned.

What you need to know

Answer each one before you reveal it.

Your recallNot started

Process

State the three stages a court works through when a party relies on an exclusion clause.

Evaluation

Distinguish an exclusion clause from a limitation clause.

Key term

Why does an onerous exclusion clause require more prominent notice than an ordinary term?

Questions from this subtopic

Each one with the model answer underneath.

1
Distinguish an exclusion clause from a limitation clause.
Model answer
An exclusion clause seeks to exclude liability for a breach altogether, whereas a limitation clause accepts liability but caps the amount recoverable or restricts the way a claim may be brought.
2
State the three stages a court works through when a party relies on an exclusion clause.
Model answer
The court asks first whether the clause was incorporated into the contract, secondly whether on its true construction it covers the loss that occurred, and thirdly whether statute prevents reliance on it.
3
How may an exclusion clause be incorporated into a contract?
Model answer
It may be incorporated by signature of a contractual document, by reasonable notice given before or at the time the contract is made, or by a consistent and regular course of dealing between the parties.
4
Why does an onerous exclusion clause require more prominent notice than an ordinary term?
Model answer
The party relying on it must take reasonable steps to bring it to the other side's attention, and the more unusual or burdensome the clause the more is required, because a reasonable person would not expect to find such a term in that document.
5
State the contra proferentem rule.
Model answer
Any ambiguity in an exclusion clause is construed against the party seeking to rely on it, since that party drafted the wording and could have made it clear.
6
What guidance did Canada Steamship Lines v The King (1952) give on excluding liability for negligence?
Model answer
A clause expressly mentioning negligence will exclude it, and where it does not the court asks whether the words are wide enough to cover negligence and whether the clause could instead operate on some other head of liability, in which case negligence is not covered.

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Law Making in Wales and the UK

Delegated Legislation

Statutory Interpretation

Judicial Precedent

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