Law of Contract - Exclusion Clauses - Essay Example

Exclusion clauses are only considered valid if they are consistent to the law and have been included correctly in the contract. Interpretation rules of contracts require that exclusion clauses be unambiguous and clearly expressed. This is because if they are unambiguous or are unclearly unexpressed they will be ineffective. I would notify Marion that under the UK laws, exclusion clauses are regulated by statutes: the Unfair Terms in Consumer Contracts Regulations 1999 and the Unfair Contract Terms Act (UCTA) 1977, as well as a number of common law rules that limit the operation of these clauses.

2 There was a breach of implied terms by the seller (Practical Electricals Ltd) acting in the course of business as the seller implied that the goods supplied under the contract were of satisfactory quality only for the buyer to find that they are not of satisfactory quality. . king, it was expounded that if the exclusion is wider than the party relying on it must put more efforts to bring the attention closer to the other party.3 Also, incorporation test demands that a contract pass the test of incorporation by notice which requires that an exclusion clause be incorporated into the contract if the party relying on it made considerable efforts in bringing attention of the clause to the other party, as stated in the case of Parker v SE Railway.

4 More importantly, as demonstrated in Olley v Marlborough, the party relying on a given clause must give notice regarding exclusion clauses before entering into an agreement with the other party.5 . Besides, the clauses should be part of the contract. As noted in the case of Chapleton v Barry UDC, reliance of exclusion clause that does not form part of the contract by one of the parties renders the clause ineffective.6 In this case, the defendant was relying on exclusion clause that did not form part of the clause as it was written on the back of the receipt.

In addition, the previous course of dealings forms a reasonable basis of incorporation of exclusion clauses. Incorporation of exclusion clauses may be done if there have consistent and regular course of dealings between the parties to the contract, as illustrated in the case of McCutcheon v David MacBrayne Ltd.7 Traditionally, incorporation by signature is considered as the most appropriate way of ensuring that the exclusion clauses form part of the contract. An exclusion clause is part of the contract if the document on which the clause is written has been signed by all relevant parties, as illustrated in the case of L'Estrange v Graucob.

8 In the case, it was held that the party signing a contract is bound by it and it would be immaterial whether