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The Law of Personal Property - Essay Example

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The view of the common law for a very long time has been that the parties to a contract are free to decide upon the obligations that they intend to be binding upon them, so regulation in context of the content of the contract by courts have been only in exceptional circumstances…
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The Law of Personal Property
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Download file to see previous pages The reluctance of the courts to interfere with the terms of the contract has led to the development of rules which relate to the 'incorporation' (whether the clause is a part of the contract) and 'construction' (whether the clause covers the breach). The potential of the approach has been limited by the House of Lords.
Incorporation requires any clause to have been incorporated as a term of the contract for it to be effective. Incorporation of clauses, most commonly limited liability clauses may take place through one of the three ways which will be briefly discussed. Firstly it can be through inclusion in the contractual document duly signed by the other party. (L'Estrange v Graucob1) Secondly the clause can be incorporate through provision of reasonable notice at or before the time of contract, so if notice is provided late it will stand void (Chapelton v. Barry UDC2). Finally the clause may be incorporate through a 'course of dealing', which is presumed when exclusion clause had been part of the previous contracts that had been made between the parties. (Kendall (Henry) & Sons v. Lillico (William) & Sons Ltd)3
After establishing the incorporation the next issue is that on proper construction the particular breach which has occurred is covered by the clause. (Andrews v. Singer4) The courts have stated that due to the statutory provisions there is a lesser need for adoption of strained constructions of clauses so as to limit their scope.( Lord Wilberforce in Photo Production Ltd v. Securicor Transport Ltd.)
Further at one point in time the Court of Appeal had stated that an exclusion clause would not apply where a fundamental breach had taken place. A fundamental breach has been said to occur when either there has been a breach of a particularly important term or through a breach depriving then entirety of the benefits of the contract to the other party.
The exclusion clauses are now regulated by the statutory framework that is Unfair Contract Terms Act 1977(UCTA). It is important to point out that the Act operates alongside the common law and so it remains open to strike down a clause through the rules of common law without the need to take into account the effect of the UCTA. This can be best explained by saying that an argument of incorporation of the clause into the contract can be raised. Thus it can be said that the validity of a clause is entirely dependent on both common law and the statutory controls that is UCTA and Unfair Terms in Consumer Contract Regulations 1999.
The main or primary concern of Unfair Contract Terms Act 1977 is to deal with the limitation and exclusion clauses and so it is not concerned with the unfair terms which are prevalent in a contract. The provisions are therefore essential concerned with business liability that the liabilities which arise in the course of a business. So if a private individual has laid down an exclusion clause then this would be subject to the common law rules which have been discussed. The course of business had been construed in R & B Customs Brokers v. UDT5 where it was found that certain contracts which are entered into by a business do not fall within the ambit of 'in the course of business'
The different ways of limitation or exclusion of liability are found in s.13. Most of the provisions which have ...Download file to see next pagesRead More
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