Exclusion Clause Case Study

To effectively rule out all possible liabilities for negligence, exclusion clauses contained in the contract are required to have an exceptionally thorough standard. In Harvey’s case, Clause 2 stated “no liability can be accepted for loss or damage to the customer’s goods”. As said above, in order to successfully rule out liability for negligence, the exclusion clauses in the contract has to be very clear and precise. If Capability Limited attempts to reject liability for any loss or damage, Clause 2 may possibly be ineffective as it is not adequately precise and particular regarding the cause. In Harvey’s case, both exclusion clauses undoubtedly made no specific mention of negligence. Essentially, the clauses will not be in favor of Capability Limited as in White v John Warwick [1953] 1 WLR 1285, the ambiguity of the exclusion clause caused it to be ineffective and failed to exclude the defendants from liability in negligence, neither was the clause in Baldry v Marshall [1925] 1 KB 260.

(2) Then again, due to the Unfair Contract Terms Act

Section 11(1) of the Act stated “In relation to a contract term, the requirement of reasonableness is that the term shall have been a fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made”. In Section 11(3), the Act also stated that the requirement of reasonableness for a notice is that it should be unbiased as well as reasonable so as to concede reliance on it. Furthermore, in the case of Stewart Gill v Horatio Myer [1992] 1 QB 600, the court specified that clauses will be judged and considered as a whole, instead of only the section claimed to be unreasonable. Owing to this, Clause 2 in the problem may possibly be ineffective as a