1. What are the purposes for which an exclusion clause might be used in a
commercial contract and in a contract with a consumer?
commercial contract = liability
consumer = sale of goods
purposes of exclusion clauses – prevent liability, allocation of risk
position of consumer in terms of exclusion clauses – unequal
bargaining power – less likely to read fine print/understand
contract
consumer likely be weak party
More negotiating power of consumer – effect some more clauses,
more likely to change terms in small business
exclusion clauses – identify rights and duties of parties
when there is a loss – allocated between two – also identifying
contractual rights and duties
2. Mary runs a music shop for a living. She breeds pedigree dogs as a
hobby. She regularly buys six months’ supply of dog food at a time from
Gourmet Puppyfood Ltd. The contract of sale provides that (a) the buyer
must inform Gourmet Puppyfood of any defects in the product within a
week of purchase, and (b) any liability for defective products is limited to
the contract price. Mary’s latest batch of dog food turns out to be
defective, and most of her dogs become ill and require expensive visits to
the veterinarian as a result.
Advise Mary.
r&b brocker v united… - case about private business, owned by
two, bought car for half business or half personal use – decided
that they were a consumer
question – whether seller could not include liability? Courts said
they couldn’t because they were a consumer
first step – see whether clause was incorporated? – by signature,
notice, course of dealing
second step – if it covers any losses? – does provision in contract
reflect to what happened/govern what happened in reality – done
by interpretation, courts will determine whether it covers the loss
if not very clear – then applies contra rule [exclusion clause
construed as narrowly as possible to person trying to use it, stop
them using it] with modern cases
commercial contract and in a contract with a consumer?
commercial contract = liability
consumer = sale of goods
purposes of exclusion clauses – prevent liability, allocation of risk
position of consumer in terms of exclusion clauses – unequal
bargaining power – less likely to read fine print/understand
contract
consumer likely be weak party
More negotiating power of consumer – effect some more clauses,
more likely to change terms in small business
exclusion clauses – identify rights and duties of parties
when there is a loss – allocated between two – also identifying
contractual rights and duties
2. Mary runs a music shop for a living. She breeds pedigree dogs as a
hobby. She regularly buys six months’ supply of dog food at a time from
Gourmet Puppyfood Ltd. The contract of sale provides that (a) the buyer
must inform Gourmet Puppyfood of any defects in the product within a
week of purchase, and (b) any liability for defective products is limited to
the contract price. Mary’s latest batch of dog food turns out to be
defective, and most of her dogs become ill and require expensive visits to
the veterinarian as a result.
Advise Mary.
r&b brocker v united… - case about private business, owned by
two, bought car for half business or half personal use – decided
that they were a consumer
question – whether seller could not include liability? Courts said
they couldn’t because they were a consumer
first step – see whether clause was incorporated? – by signature,
notice, course of dealing
second step – if it covers any losses? – does provision in contract
reflect to what happened/govern what happened in reality – done
by interpretation, courts will determine whether it covers the loss
if not very clear – then applies contra rule [exclusion clause
construed as narrowly as possible to person trying to use it, stop
them using it] with modern cases
