5 Interpretation of exclusion clauses
Exclusion clauses must be explained clearly to the other party so that other party is aware the exact meaning and possible impact of that clause.
If the other party is misleading through vague statement using in exclusion clause then that exclusion clause will have no worth.
Case law: Alderslade v Hendon Laundry 1945
6 The unfair contract terms Act 1977
The unfair contract terms Act 1977 aims to protect consumers from harsher effects of exclusion clauses.
The Act mainly applies to commercial contracts.
There must be balance between freedom of contract and protection of public from unfair exclusion clauses.
This Act considers followings aspects to protect general public.
- It applies to clauses that attempt to escape from liability of negligence.
- It applies to clauses that attempt to escape from liability of breach of contract.
According to this UCTA, some clauses are automatically void and all other clauses must pass through test of reasonableness.
The clause that attempts to escape or exclude liability for death or personal injury resulting from negligence considered as void.
The one cannot exclude liability for defective goods in the sale of goods Act 1979.
UCTA also protect to not exclude implied terms given in the sale of goods Act 1979.
Condition relating to description, quality and fitness