Contract Law - Contents of a Contract: Exemption Clauses
[STEP 1] Here, there is a valid B2B / C2B / C2C sale of goods / services contract
between X, acting in the course of their business, and Y.
[STEP 2] Possible causes of action - breaches of express or implied terms
Possible breaches
There may be a breach of the express term to [FINISH USING BELOW EXPRESS
TERM NOTES].
Given the nature of the contract (see above), there may be a breach of the implied term
to / term implied by the courts based on [FINISH USING BELOW IMPLIED TERM
NOTES].
[NORMALLY IF EMPLOYERS NOT PRIVY TO CONTRACT INVOLVED] Tort of
negligence
C could also sue D in the tort of negligence, and [INSERT EMPLOYER] via vicarious
liability. D had a duty to take reasonable care when [INSERT ACTION], and arguably
breached this by duty [INSERT NEGLIGENT ACT], which caused [INSERT DAMAGE /
HARM TO C]. On the facts, [INSERT D] cannot rely on any defences.
- Express terms are terms specifically agreed by the parties, orally or in writing.
- Implied terms are terms not expressly created by the parties but are implied into
the contract, either by a court in the course of litigation, or by statute.)
Terms implied by the courts
Terms can be implied by the courts during litigation:
[INSERT RELEVANT ONES FROM BELOW]
- Based on local custom or trade (Hutton v Warren);
- Based on a previous course of dealings between the parties (Spurling v
Bradshaw);
- Based on the presumed intentions of parties (The Moorcock; Shirlaw v Southern
Foundries Ltd);
- Due to the type of contract (Liverpool City Council v Irwin and Another).
, Local custom or trade
Applies to points that seem so obvious that the parties do not bother to make an
express provision (Hutton v Warren).
- In Hutton, a seed allowance to a farmer was implied into the contract as it was
customary for it to be given and there was nothing in the contract to suggest this
custom should not be followed.
Previous course of dealings
Terms can be incorporated into the contract by parties’ previous consistent course of
dealings (Spurling v Bradshaw).
Presumed intentions of the parties
To imply terms relation to presumed intention, the court can apply two tests:
- 1) ‘Business efficacy’ test - the court should consider whether a term is
necessary to make the contract work commercially (The Moorcock).
- 2) ‘Officious bystander’ test - a term can only be implied if the point was so
obvious that it went without saying that that was what the parties intended
(Shirlaw v Southern Foundries Ltd).
Type of contract
Where a contract is of a kind which frequently occurs, the court may imply provisions
which are typical of that kind of contract unless the parties make contrary provision,
such as the landlord’s responsibility for repairing common areas in tower blocks
(Liverpool City Council v Irwin and Another).
Terms implied by statute
- Sale of Goods Act 1979 (SGA 1979)
- Since the CRA 2015, the SGA 1979 applies to contracts for the sale of
goods B2B, C2B, and C2C, not B2C.
- Trader - ‘a person acting for purposes relating to that person’s
trade, business, craft or profession, whether acting personally or
through another person acting in the trader’s name or on the
trader’s behalf’ - CRA 2015
[STEP 1] Here, there is a valid B2B / C2B / C2C sale of goods / services contract
between X, acting in the course of their business, and Y.
[STEP 2] Possible causes of action - breaches of express or implied terms
Possible breaches
There may be a breach of the express term to [FINISH USING BELOW EXPRESS
TERM NOTES].
Given the nature of the contract (see above), there may be a breach of the implied term
to / term implied by the courts based on [FINISH USING BELOW IMPLIED TERM
NOTES].
[NORMALLY IF EMPLOYERS NOT PRIVY TO CONTRACT INVOLVED] Tort of
negligence
C could also sue D in the tort of negligence, and [INSERT EMPLOYER] via vicarious
liability. D had a duty to take reasonable care when [INSERT ACTION], and arguably
breached this by duty [INSERT NEGLIGENT ACT], which caused [INSERT DAMAGE /
HARM TO C]. On the facts, [INSERT D] cannot rely on any defences.
- Express terms are terms specifically agreed by the parties, orally or in writing.
- Implied terms are terms not expressly created by the parties but are implied into
the contract, either by a court in the course of litigation, or by statute.)
Terms implied by the courts
Terms can be implied by the courts during litigation:
[INSERT RELEVANT ONES FROM BELOW]
- Based on local custom or trade (Hutton v Warren);
- Based on a previous course of dealings between the parties (Spurling v
Bradshaw);
- Based on the presumed intentions of parties (The Moorcock; Shirlaw v Southern
Foundries Ltd);
- Due to the type of contract (Liverpool City Council v Irwin and Another).
, Local custom or trade
Applies to points that seem so obvious that the parties do not bother to make an
express provision (Hutton v Warren).
- In Hutton, a seed allowance to a farmer was implied into the contract as it was
customary for it to be given and there was nothing in the contract to suggest this
custom should not be followed.
Previous course of dealings
Terms can be incorporated into the contract by parties’ previous consistent course of
dealings (Spurling v Bradshaw).
Presumed intentions of the parties
To imply terms relation to presumed intention, the court can apply two tests:
- 1) ‘Business efficacy’ test - the court should consider whether a term is
necessary to make the contract work commercially (The Moorcock).
- 2) ‘Officious bystander’ test - a term can only be implied if the point was so
obvious that it went without saying that that was what the parties intended
(Shirlaw v Southern Foundries Ltd).
Type of contract
Where a contract is of a kind which frequently occurs, the court may imply provisions
which are typical of that kind of contract unless the parties make contrary provision,
such as the landlord’s responsibility for repairing common areas in tower blocks
(Liverpool City Council v Irwin and Another).
Terms implied by statute
- Sale of Goods Act 1979 (SGA 1979)
- Since the CRA 2015, the SGA 1979 applies to contracts for the sale of
goods B2B, C2B, and C2C, not B2C.
- Trader - ‘a person acting for purposes relating to that person’s
trade, business, craft or profession, whether acting personally or
through another person acting in the trader’s name or on the
trader’s behalf’ - CRA 2015
