Exclusion clause in the law of contract. LAW 1108 – CONTRACT LAW (Essay Sample)

Exclusion clause
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Professor
MIDDLESEX UNIVERSITY
LAW 1108 – CONTRACT LAW
Date
Introduction
Exclusion clause: is a term in a contract which intends to exclude one of the parties from liability or limit the person's liability to specific listed conditions, circumstances, or situations. It can be inserted into a contract which aims to exclude or limit one's liability for breach of contract or negligence. However the party may only rely on such a clause if
It has been incorporated into the contract
It has been made clear
Adheres to the unfair contract terms act 1977 (UCTA) And the unfair terms an consumer contract regulations.
Unfair Contract Terms Act 1977 (UCTA)[Unfair Contact Terms Act 1997]
This can be found, enshrined in section 11 of UCTA.
Section 11(1) defines the test, as whether or not the term is a fair and reasonable one to have included in the contract, in light of all circumstances known at the time of contracting. Prior under Section 11(1) of UCTA, in order to pass the reasonableness test, a contract term must have been:
".... a fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made".
In addition, under Section 11(4) of UCTA, where a party seeks by contract to restrict its liability to a specified sum of money, the courts will looks at the resources available to that party to meet the liability should it arise and the availability of insurance cover.
Section 11(5) rules that the burden of proving this reasonableness relies on the party attempting to use the clause.
The factors to assess reasonableness include,
Factors identified by legislation.
The purpose of this act is to restrict the extent to which liability in a contract can be excluded for breach of contract and negligence provided the term or notice satisfies the requirement of reasonableness.
Incorporation
For the party to a contract to rely on an exclusion clause have to be in a position to provide evidence and point out that really is a part of the contract. An exclusion clause can be incorporated into the contract by three different ways:
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