6. Exemption clauses and unfair contract terms

Abstract

Course-focused and comprehensive, Poole’s Textbook on Contract Law provides an accessible overview of the key areas on the law curriculum. A clause which seeks either to exclude a party’s liability for breach or to limit that liability to a specified amount is known as an exemption clause. It is also possible for exemption clauses to seek to exclude or limit the remedies which would otherwise be available for breach or seek to deny that any breach of contract or breach of a duty of care has occurred. Although such clauses can allocate risks between the parties and prevent duplicate insurance cover, both the courts and the Parliament in the UK have sought to control their use. An exemption clause is enforceable if the clause in question is incorporated as a term, covers the loss that has occurred in the circumstances in which it arose, and is not rendered unenforceable by either the Unfair Contract Terms Act 1977 (B2B contracts) or Part 2 of the Consumer Rights Act 2015 (B2C contracts). This chapter examines the construction of exemption clauses as well as the legislative regulation of exemption clauses and, in the consumer context, unfair terms.