Professional Documents
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Contents
A. Incorporation of Terms
B. Construction
C. Unfair Contract Terms Act
A. Incorporation of terms
The concept of incorporation deals with how printed terms become part of the
contract, and thus terms of the contract.
(a) Signed documents: LEstrange v Graucob (1934) a person who signs a
document which contains contractual terms is normally bound by them even
though he has not read them, and even though he is ignorant of their precise
legal effect.
(b) Unsigned documents notices, receipts, tickets, etc. These documents will only
have contractual effect (that is, become part of the contract) when both these
requirements are met:
(i) The terms are brought to the notice of the contracting party before or at
the time that the contract is made (contemporaneity rule)
B. Construction
The concept of construction deals with what the words in a document or agreement
mean, and how does one reasonably construe or interpret the meaning of the words
used. This will have implications on the effectiveness of an exclusion clause and the
extent that the clause will exclude, restrict or limit a contracting partys liability in the
event of his breach of contract.
Contra proferentum
This common law rule of construction means that any ambiguity in the words used in
an exclusion clause is interpreted strictly against the maker (excluder) of the
exclusion clause.
Fraud or misrepresentation
A party who misrepresents (albeit innocently) the contents or effect of a clause
inserted by him into a contract cannot rely on the clause in the face of his
misrepresentation: see Curtis v Chemical Cleaning and Dyeing Co (1951).
The Act generally applies only to business liability: see section 1(3). This means that
the Act does not cover exclusion clauses in contracts between one consumer and
another consumer.
The burden of proving that the clause is reasonable (except exclusion for death or
personal injury which cannot be excluded altogether) lies on the party relying on the
exclusion clause (excluder): see section 11(5).
The exclusion of liability arising under contract only applies as between dealer and
consumer (B2C) or, if the other party is a dealer (B2B) as well, then on the excluders
written standard terms of business.