CLAW1001 Lecture Notes - Lecture 3: Dry Cleaning, Undue Influence, Australian Consumer Law
22 May 2018
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LECTURE 3
Exclusion Clause
Exclusion clause or exemption clause are terms in a contract used to limit or exclude a
party’s liability for breach of contract or negligence. For the exclusion clause to be effective
it must be a term in the contract and the clause must cover the breach or liability that has
occurred.
• Issues with exclusion clauses:
1. Is the clause incorporated into the contract?
2. What does the clause mean?
3. Does it apply to the facts to exclude liability?
4. How does the clause interact with legislation?
• Incorporation with Exclusion Clauses
Is the exclusion clause a term of the contract? How can an exclusion clause be incorporated
into the contract?
1. By signature
2. By notice
3. BY prior dealings
1. Incorporation by Signature: parties bound by terms in signed document, even if they
have not been read.
BUT there are exception to the general rule:
1. Document is not one that would be expected to contain contractual terms
2. The contract is of no effect
3. Fraud
4. Misrepresentation
5. Duress
6. Undue influence
7. Unconscionable conduct
8. Non ext factum
• Cases relating to the Signature Rule: Curtis v Chemical Cleaning & Dyeing Co [1951] 1
KB 805
C took dress to dry cleaners and was asked to sign a receipt stating dry cleaners not liable for
damages whatever the cause. C asked why she had to sign and was told that cleaners not
accepting liability for damage to beads and sequins. C signed. Dress was returned stained.
Signature obtained by misrepresentation as to the effect of the document — signature rule not
applicable.
Could dry cleanings rely on the exclusion clause? No
Did dry cleaners have to pay for damage? Yes.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Exclusion clause or exemption clause are terms in a contract used to limit or exclude a party"s liability for breach of contract or negligence. How can an exclusion clause be incorporated into the contract: by signature, by notice, by prior dealings, incorporation by signature: parties bound by terms in signed document, even if they have not been read. C took dress to dry cleaners and was asked to sign a receipt stating dry cleaners not liable for damages whatever the cause. C asked why she had to sign and was told that cleaners not accepting liability for damage to beads and sequins. Signature obtained by misrepresentation as to the effect of the document signature rule not applicable. You can"t add clauses after the contract as been formed: whether notice is reasonable and sufficient is proportional to the unusualness and/or onerousness of the clause, exclusion clauses: unsigned documents notice.
