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{{ | {{Contract law}} | ||
An '''exclusion clause''' is a term in a [[contract]] that seeks to restrict the rights of the parties to the contract. | An '''exclusion clause''' is a [[Contractual Term|term]] in a [[contract]] that seeks to restrict the rights of the parties to the [[contract]]. | ||
Traditionally, the district [[court]]s have sought to limit the operation of exclusion clauses. In addition to numerous [[common law]] rules limiting their operation, in [[England and Wales Consumer Contracts Regulations 1999]]. The [[Unfair Contract Terms Act 1977]] applies to all contracts, but the [[Unfair Terms in Consumer Contracts Regulations 1999]], unlike the [[common law]] rules, do differentiate between [[contract]]s between businesses and [[contract]]s between business and [[consumer]], so the [[law]] seems to explicitly recognize the greater possibility of exploitation of the [[consumer]] by businesses. | Traditionally, the district [[court]]s have sought to limit the operation of exclusion clauses. In addition to numerous [[common law]] rules limiting their operation, in [[England and Wales Consumer Contracts Regulations 1999]]. The [[Unfair Contract Terms Act 1977]] applies to all contracts, but the [[Unfair Terms in Consumer Contracts Regulations 1999]], unlike the [[common law]] rules, do differentiate between [[contract]]s between businesses and [[contract]]s between business and [[consumer]], so the [[law]] seems to explicitly recognize the greater possibility of exploitation of the [[consumer]] by businesses. | ||
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As espoused in ''Darlington Futures Ltd v Delco Australia Pty Ltd'',<ref>(1986) 161 CLR 500</ref> the meaning of an exclusion clause is construed in its ordinary and natural meaning in the context. Although we construe the meaning much like any other ordinary clause in the [[contract]], we need to examine the clause in light of the contract as a whole. Exclusion clauses should not be subject to a strained construction in order to reduce the ambit of their operation.<ref>[1986] HCA 82</ref> The judge in ''[[R&B Customs Brokers Co Ltd v United Dominions Trust Ltd]]''<ref>[1988] 1 All ER 847</ref> refused to allow an exemption clause, of which did cover the nature of the [[implied term]], on the grounds that it did not make specific and explicit reference to that [[Contractual Term|term]].<ref>The term in question was the implied term as to fitness-to-purpose pursuant to the Sale of Goods Act 1979 s14(3).</ref> | As espoused in ''Darlington Futures Ltd v Delco Australia Pty Ltd'',<ref>(1986) 161 CLR 500</ref> the meaning of an exclusion clause is construed in its ordinary and natural meaning in the context. Although we construe the meaning much like any other ordinary clause in the [[contract]], we need to examine the clause in light of the contract as a whole. Exclusion clauses should not be subject to a strained construction in order to reduce the ambit of their operation.<ref>[1986] HCA 82</ref> The judge in ''[[R&B Customs Brokers Co Ltd v United Dominions Trust Ltd]]''<ref>[1988] 1 All ER 847</ref> refused to allow an exemption clause, of which did cover the nature of the [[implied term]], on the grounds that it did not make specific and explicit reference to that [[Contractual Term|term]].<ref>The term in question was the implied term as to fitness-to-purpose pursuant to the Sale of Goods Act 1979 s14(3).</ref> | ||
=== | ===Contra proferentem=== | ||
If, after attempting to construe an exclusion clause (or indeed any other contractual term) in accord with its ordinary and natural meaning of the words, there is still ambiguity then (if the clause was imposed by one party upon the other without negotiation) the [[contra proferentem]] rule applies. Essentially this means that the clause will be construed against the interests of the person who proposed its inclusion. that is to say, [[wiktionary:contra|''contra'']] (against) the [[wiktionary:proferens|''proferens'']] (proposer).<ref>{{cite AustLII|HCA|82|1986|litigants=Darlington Futures Ltd v Delco Australia Pty Ltd |parallelcite=(1986) 161 [[Commonwealth Law Reports|CLR]] 500 |courtname=auto |date=16 December 1986}}.</ref> | If, after attempting to construe an exclusion clause (or indeed any other contractual term) in accord with its ordinary and natural meaning of the words, there is still ambiguity then (if the clause was imposed by one party upon the other without negotiation) the [[contra proferentem]] rule applies. Essentially this means that the clause will be construed against the interests of the person who proposed its inclusion. that is to say, [[wiktionary:contra|''contra'']] (against) the [[wiktionary:proferens|''proferens'']] (proposer).<ref>{{cite AustLII|HCA|82|1986|litigants=Darlington Futures Ltd v Delco Australia Pty Ltd |parallelcite=(1986) 161 [[Commonwealth Law Reports|CLR]] 500 |courtname=auto |date=16 December 1986}}.</ref> | ||
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* If a claim on another basis can be made other than that of negligence, then it covers that basis instead. | * If a claim on another basis can be made other than that of negligence, then it covers that basis instead. | ||
In [[Australia]], the ''four corners rule'' has been adopted in preference over the idea of a "fundamental breach".<ref name="Sydney City Council v West">{{cite AustLII|HCA|68|1965|litigants=Sydney City Council v West (Ticket case) |parallelcite=(1965) 114 [[Commonwealth Law Reports|CLR]] 481 |courtname=auto |date=16 December 1965}}.</ref> The court will presume that parties to a contract will not exclude liability for losses arising from acts not authorised under the contract. However, if acts of negligence occur during authorised acts, then the exclusion clauses shall still apply;<ref>{{cite AustLII|HCA|44|1954|litigants=Davis v Pearce Parking Station Pty Ltd}}: Clear words are necessary to exclude liability for negligence.</ref><ref name="TNT v May & Barker">{{cite AustLII|HCA|46|1966|litigants=Thomas National Transport (Melbourne) Pty Ltd v May & Baker (Australia) Pty Ltd |parallelcite=(1966) 115 [[Commonwealth Law Reports|CLR]] 353 |courtname=auto |date=10 August 1966}}.</ref> | In [[Australia]], the ''four corners rule'' has been adopted in preference over the idea of a "fundamental breach".<ref name="Sydney City Council v West">{{cite AustLII|HCA|68|1965|litigants=Sydney City Council v West (Ticket case) |parallelcite=(1965) 114 [[Commonwealth Law Reports|CLR]] 481 |courtname=auto |date=16 December 1965}}.</ref> The court will presume that parties to a contract will not exclude liability for losses arising from acts not authorised under the contract. However, if acts of negligence occur during authorised acts, then the exclusion clauses shall still apply;<ref>{{cite AustLII|HCA|44|1954|litigants=Davis v Pearce Parking Station Pty Ltd}}: Clear words are necessary to exclude liability for negligence.</ref><ref name="TNT v May & Barker">{{cite AustLII|HCA|46|1966|litigants=Thomas National Transport (Melbourne) Pty Ltd v May & Baker (Australia) Pty Ltd |parallelcite=(1966) 115 [[Commonwealth Law Reports|CLR]] 353 |courtname=auto |date=10 August 1966}}.</ref> | ||
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==Statutory control== | ==Statutory control== | ||
Even if terms | Even if terms are incorporated into the [[contract]] and so would be effective, there are various statutory controls over the types of [[Contractual Term|term]]s that may have legal effect. The [[Unfair Contract Terms Act 1977]] renders many exemption clauses ineffective. The [[Unfair Terms in Consumer Contracts Regulations 1999]] provide further [[Consumer Protection|protection for consumers]]. | ||
==References== | ==References== | ||
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|label=Exclusion clause }} | |label=Exclusion clause }} | ||
<references />16. See also, ''Darlington Futures v Delco Aus'' [1986] HCA 82 [http://www.austlii.edu.au/cgi-bin/LawCite?cit=[1986]%20HCA%2082] | <references />16. See also, ''Darlington Futures v Delco Aus'' [1986] HCA 82 [http://www.austlii.edu.au/cgi-bin/LawCite?cit=[1986]%20HCA%2082] | ||
{{DEFAULTSORT:Exclusion Clause}} | |||
[[Category:Contract law]] | |||
[[Category:Contract clauses]] |