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Exclusion clause - Case Study Example

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Contracts are essential documents for all commercial relationship between two or more parties that are willing and ready to go into an agreement with the hope of enjoying some certain levels of relationship as indicated in the contracts. These relationships could be in business, employment, education and other service-related transactions…
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Exclusion clause
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Download file to see previous pages In recent years, it has become common that the weaker parties have often challenged the stronger parties for compensations in case some accidents or dangerous things happen to them in the course of carrying out their commercial relationship, even though they were statutorily excluded from their contractual agreement. This essays explains how these exclusion clauses could find their ways into a contractual agreement that the stronger parties would be willing to accept, although grudgingly.
For the purpose of explaining how exclusion clauses could become a part of a contract, the famous law case of Sayers v International Drilling Co. N.V is used. This is an example of an employment contractual agreement. Sayers, an English rig worker was hired in England by a Dutch subsidiary of a Texan oil drilling company to work on oil rigs abroad. He had an employment contract with International Driving Co. N.V that stated that if any injury occurs to him while working, he would accept the company's "Compensated Program" as his only remedy, and that he should waive any cause of action he might have in United Kingdom or under any other laws. But, suddenly, Sayers was injured when he was sent to work on an oil rig off the coast of Nigeria. The injury was as a result of his co-workers' carelessness. Sayers then decided to bring a legal action in tort against the Dutch company in England: this is an action expected to force the Dutch company to compensate him other than the "compensation program" stipulated in his contractual agreement with the company (Nygh, 1999).
Possible ways the Dutch Company could include its exclusion clause in the contract
Nygh (1999) explained that it is possible for Mr. Sayers to compel his employer in the ways described below to include an excluded clause into the contract: in this regard, offering compensations for injury suffered by an employee rather solely relying on limited "Compensated Program".
(a) Broader classification: An employee that drags his or her employer to the court seeking an inclusion of a clause may do so on the reason that the excluding clause is inconclusive in its definitions. Take for example; International Drilling Co. N.V may have defined compensated "injury" as the one sustained in the course of duty. However, this classification could be extended to cover the injury caused by carelessness of co-workers, as in the case of Mr. Sayers, if his co-workers injured him in the course of their duty for the company. Indirectly, Mr. Sayers is involved in the process of carrying out such company's duty, even though he may be at rest when the mishap happened. Broader classification like this has compelled employers to re-consider their stance on excluded clauses. Another relative example was in the case of an employee that got injured while using the company's car on a weekend; meanwhile his company stated that all off-duty car accidents would be at the employee's liability. However, extending this classification to cover using the said vehicle to convey another employee on duty for the company could force their employer to accept removing the exclusion clause.
In the court of law, cases like these are handled by lawyers who employed the principle of deconstruction to argue with ...Download file to see next pagesRead More
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