1. Exclusion Clauses
Exclusion Clauses

2. Standard form contract
Standard form contract
• The standard form contract is a standard
The standard form contract is a standard
document containing terms and conditions on
which they contract with their customers.
which they contract with their customers
• Th i di id l
The individual must usually take it or leave it
ll k i l i
because the supplier is the only supplier in the
market. Pg 115
k P 115

3. • For example, you have no choice but to sign
For example, you have no choice but to sign
on the standard form contract if you want to
advertise in, say, newspaper or TV station
even though if you don't agree with some of
the terms.
• One of the problems with standard form
contract is that the dominating party tries to
exclude liability for the terms in the contract

4. Exclusion clause
Exclusion clause
• A clause in a contract which purports to
A clause in a contract which purports to
exclude liability altogether or to restrict it by
limiting damages or by imposing other
limiting damages or by imposing other
onerous conditions.
• Also known as exemption clause
Also known as exemption clause
Pg 115

5. Exclusion clauses
• The courts generally seeks to protect
The courts generally seeks to protect
consumers from the harsher effects of
exclusion clause in two ways:
exclusion clause in two ways:
– Exclusion clauses must be incorporated into a
contract before they have legal effect
contract before they have legal effect
– Exclusion clauses are interpreted strictly. This may
p e e app ca o o c ause
prevent application of clause
Pg 115

6. Consumer protection
Consumer protection
• The law also seeks to protect consumers who are
The law also seeks to protect consumers who are
usually the weaker party to the contract from the
full force of exclusion clauses.
• The person who uses a standard form contract in
dealing with a consumer cannot, unless the term
dealing with a consumer cannot, unless the term
is reasonable, restrict liability for his own breach.
• For example, a clause attempts to restrict liability
For example, a clause attempts to restrict liability
for other loss or damage arising from negligence
is void unless it can be shown to be reasonable.

7. The courts
The courts
• The courts usually to look at the terms in the
e cou ts usua y to oo at t e te s t e
exclusion clauses if:
– They are not against statute; and
– They are not ambiguous; and
• If the terms are ambiguous, the court may interpret any
ambiguity against the person at fault who relies on the
ambiguity against the person at fault who relies on the
exclusion
– They are reasonable
• I th
Is the content reasonable?
t t bl ?
• Has the content been reasonably brought to the attention of
the customers?

8. Unfair contract terms act 1977
Unfair contract terms act 1977
• Any clause that attempts to restrict for death or
Any clause that attempts to restrict for death or
personal injury arising from negligence is void
• Any clause that attempts to restrict liability for
Any clause that attempts to restrict liability for
other loss or damage arising from negligence is
void unless it can be shown to be reasonable
void unless it can be shown to be reasonable
• Any clause that attempts to limit liability for
breach of contract, where the contract is based
breach of contract, where the contract is based
on standard terms or conditions, is void unless it
can be shown to be reasonable Pg 121
g

9. Void by statute ‐ Pg 121
by statute Pg 121
• If an exclusion clause is made void by statute it is
If an exclusion clause is made void by statute, it is
unnecessary to consider how other legal rules
might affect it. There is simply no need to assess
g py
whether it is reasonable
• Those exclusion clauses in the standard form
contract may be void if they are against statute.
contract may be void if they are against statute.
– E.g. a clause to exclude death or personal injury
resulting from negligence is void

10. Clauses Void by statute Pg 121
Clauses ‐ Void by statute – Pg 121
• A clause which exclude and limit liability for
c ause c e c ude a d t ab ty o
death or personal injury
• A guarantee clause excludes or limit liability for
g y
loss or damage caused by defect of the goods in
consumer use
• Hire purchase – exclude the condition that the
seller has a right to sell the goods
• S l f
Sale of goods to consumers – exclude or limit
d t l d li it
liability for breach of conditions relating to
description, quality, fitness
description quality fitness

11. Unfair terms to consumers
Unfair terms to consumers
• An unfair term is any term which causes a
An unfair term is any term which causes a
significant imbalance in the parties’ right and
obligations under the contract to the
detriment of the consumer
• E.g. High pressure selling without a “cooling
down” period
Research at google – Singapore’s “unfair
contract terms act”

12. Assignment 1 Claim 5
Assignment 1 – Claim 5
• Discuss
– 2c

14. Case
Case ‐ Cheapfit
• Two issues
Two issues
1. John’s car was damaged after the service at
Cheapfit.
Cheapfit
2. John was severely injured by Cheapfit employee
negligently
• Cheapfit denied liability by use of the liability
denied liability by use of the liability
clause displayed in the premises and receipt

15. • What is an exemption clause?
What is an exemption clause?
• How do the courts look at exemption clause?
d h l k i l ?
Discuss.
• Advise John about his legal position for the
g p
two issues with Cheapfit