Ct11 - Contract Law: (2) Contents of a Contract: Exemption Clauses: Contra Preferentem Rule & Fundamental Breach

As we noted in our first podcast on exemption clauses, we are dealing with an important part of the law of contract, the effects of which we see all around us. If the clause in question has been incorporated into the contract, we must then turn our attention to effectiveness of the clause in excluding liability. There is a rule, the Contra Preferentem Rule, that if there is any doubt as to the clause, it is construed against the proferens, that is the party in whose favour the clause was drafted. Although the doctrine of Fundamental Breach properly belongs to the next part of the syllabus, it is necessary to cover it here as it was a particular response to widely drawn and often unfair exemption clauses. Much of what the courts were doing has now been put on a statutory footing by the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995

Contents: 

 2) CONTENTS OF A CONTRACT

   D. Exemption Clauses

   (ii) Contra Preferentem Rule

• What are Exemption Clauses?
• Wilful Damage and Negligence
• Three Stage Negligence Test
• Main Purpose Rule

   (iii) Doctrine of Fundamental Breach 

   (iv) Is the Clause Affected by Legislation?

• Legislation that Prohibits Use of Exemption Clauses
• Definition of a Consumer

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