1INTRODUCTION
Unconscionable is a belief in contract law that delineate terms that are so immensely biased, or vigorously one sided in favour of the party who has the haughty bargaining ability, that are incompatible to good standards. It is held to be ineffective because no equitable or informed person would otherwise admit to it.
By surveying the conditions of the parties it was decided that when the contract was made such as their bargaining ability, age and mental ability. There are many other affairs as well like matter of choice, superior skills and other responsibility or circumstances surrounding the bargaining capability. It has also been found in the acts of duplicity and deception, where the intentional distortion of fact deprives someone of a valuable ownership. When a party takes unconscionable superiority of another, the action may be treated as criminal fraud or the civil activity of duplicity.
An exemption clause is a contractual term by which one party strives to cut down either the extent of his contractual responsibility or control the other parties right to injuries or other possible cures for breach of contract. It also signifies that the exemption clause is a phrase in an agreement that give a restriction towards contracting parties. The exemption clause further known as exclusion clauses as well.
Research questions
Is there any ratification which will render the clause enforceable?
Has the clause been consolidated into the contract?
Body of Article / Main Content
2An exclusion clause is a term in a contract which aspire to exclude or restrict the accountability of one of its parties. For example, it may state that a party has no liability if the contract is breached or, alternatively, seek to restrict the range of remedies accessible or the time in which they can be affirmed. It has found in many different areas of everyday life from car parks and supermarkets to swimming pool changing rooms and train tickets.
3Consequences of exemption clauses in attempting to exclude Contractual liability
Exemption exclude liability
Many times, a party to the contract will include exemption clause to exclude or restrict the liability in the event of breach of contract. For example, the management of an organisation shall not be liable or responsible for any death or personal destructions occurred to a person which was caused by any act, negligence, careless, reckless of omission by employee, servants or agent, whomsoever in a contract.
Exemption clause doesn’t give a freedom of contract
It does not give freedom of contract because there is a term or condition attached to contract which limits the rights of the parties to the contract.
Exclusion clause doesn’t give inequality of bargain
For example, if there is a big company on one end and an ordinary customer on the other and both parties have unequal bargaining ability. So the company would take a greater advantage of the consumer. Therefore, it doesn’t give imbalance of bargain.
Exemption clause only protects the defendants
Sometime it has been proved wrong because defendant companies only rely on exemption clause to limit his liability in the event of something going wrong.
For example, if a party wants to restrict his liability in the event that they breach the contract they usually include the exclusion clause, restricting the amount that the other side can claimed the specified total.
Sections under exclusion clause
Total three sections are there under exclusion clause
Section 2(1) : It states that an exclusion clause cannot be used to prohibit or restrict business liability for death or personal harm occurred by negligence.
Section 3 : Under exclusion clause section 3 includes contractual liability
Section 6(1) : It averts the exclusion of inferred agreement as to title in contracts for sale and lease purchase in any kind of contract.
Section 7 : section 7 implied terms in contract for the bestow of goods and amenity.
Section 11(1) : It determine the test, as whether or not the term is a fair and rational one to have incorporated in the contract, in light of all situations known at the time of contracting.
Section 11(5) : It regulates that the freight of providing this integrity on the party seeking to use the clause.
Principle of exemption clauses:
Exemption clauses and third parties:-
One of the primary principle of the law of contract is that a contract is a contract allying the parties it was decided and no other or third party can either enjoy their rights or agonize any liability under it. This should also be applied to standard form contracts. For example, in case of Haseldine v C.A. Daw & Son ltd. [(1941) 2 KB 343 (CA) at p. 379 there was a contract held between two parties in which a contractor agrees to maintain and repair a lift in certain premises under and the owner had exempts him from liability, that exemption would be of no avail to the contractor against a person who is harmed due to his faulty repairs. If this were so, the life and reliability of millions of people would be in the hands of the two parties to a contract. They would then make law not for themselves only, but for regulations for countless others. GODDARD LJ nudged the contractor “that the duty to the third party does not arise out of contract, but independently of it.”
Exclusion of right of set-off:-
The right of set-off being an implement of justice and equity, its exclusion under contract clauses has been held to be prima facie unreasonable and hit by section 13 of the Act.
Case laws
4Thornton v Shoe Lane Parking [(1971) 1 AII ER 686]
In this case Mr. Thornton parked his car in a commercial car park. The parking had displayed a sign that the cars were parked on the owner’s risk. As it happens unfortunately, it was Mr. Thornton who got wounded, not the car. In the occurrence both the parties are faulty partially, shoe lane parking appealed in the court but unfortunately the appeal was abandon due to this Mr. Thornton was granted with $3637 6s 11d. Shoe lane parking ltd. did not contest the trial judge’s finding about the happening. They concede that they were at fault, but they claimed that they are guarded by spared condition.
The offer was accepted when Thornton drove up to the entrance of the car park and because of the movement of his car the light turned green from red and due to this the ticket thrust on him. The contract was then deduced and it could not be changed by any words printed in the ticket itself.
5Parker v south eastern railway [(1877) 2 CPD 416]
Mr. Parker forgotten the luggage in the cloakroom at a railway station and he was given a ticket in return for payment of a fee. The ticket had a clause on the back, in the ticket it was written that the railway company would not be liable in respect of any luggage exceeding the sum of $10. Mr. Parker’s luggage was stolen and the value of the luggage exceed the value written in ticket . On the basis of exclusion clause railway company attempted to eliminate the liability.
Due to the legal principles “the exclusion clause must be introduced before at the time of a contract” Mr. Parker got his claim profitably as the railway company fails to prove themselves that they had brought the claimant’s
attention to the exclusion clause. Therefore, since the claimant had not been sufficiently aware of the existence of the clause he was not bound by it.
6Hollier v Rambler Motors [(1972) 2 AB 71]
In this case Hollier was a car owner he had done his car’s repairing from the defendant’s garage 3-4 times. It was defendant’s practice, he used to fill a form while undertaking a service, and the defendant had made that form filled twice while dealing with Hollier. The form was filed in to describe the details of work to be done and the price of the repair, this form contained a statement that ‘the company will not be liable for the destruction caused by the fire to customer’s car on the defendant’s premises.
The court of appeal held that the term was not integrated into the contract by the previous course of dealing, so the claimant flourishingly got his claim. In this case, annotation of court considered that the clause did not protect the defendant. The clause was in general terms and did not refer prwcisely to negligence. For the garage to rely on the clause it must have stated distinctly and unambiguously that it would not be liable in respect of its own negligence – otherwise a customer might wisely conclude that the garage was not generally liable exclude for the situation.
7Exclusion Clauses and Disclaimer
At the end I want to conclude with that “the consumer right indicate that the treatment of exclusion clause remains prime, and sometime contentious, area in contract law. The house of lords have laid down that remiss advise given by a white-collar man would make him liable to his instantaneous advise even if the advise was given under a clause accomodating disclaimer of all liability. The contradiction would have to pass the test of authority under the 1977 Act307. Ahouse was purchased by the plaintiffs, price being paid on the basis of the advise sought from a local authority whose assessors prepared a negligent report and advise. The advise was offered under disclaimer of liability. The house turned out to be impractical and required a sum for repair which was more than the cost of the purchase price. The authority was held liable to the plaintiffs. Their lordships said that considering the high cost of the house would not be equitable and suitable for valuers to inflict on purchasers the risk of loss arising out of ineptitude or inattentive on the part of valuers. It followed, therefore, that the disclaimer was not effectual to exclude liability for the negligence of the surveyors.
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