Deck 7: Clauses Excluding or Limiting Liability

Question 1

The signing of a written contractual agreement will usually mean that a party is bound by the exclusion terms in that contract.

Answer 1

True

Question 2

Which of the following cases show the courts applying the contra proferentem rule?

A) Monarch Airlines Ltd. v London Luton Airport Ltd
B) Andrews v Singer
C) Canada Steamship Lines Ltd v The King
D) Toomey v Eagle Star Life Insurance

Answer 2

B,C

Question 3

Which of the following contracts are specifically excluded from the ambit of the UCTA

A) Contract for insurance
B) Contracts for the hire of goods
C) Charterparties for aircraft but not ships
D) Contracts for land

Answer 3

A,D

Question 4

Which of the following contracts are regulated by the UCTA

A) Contracts for the sale of goods
B) Consumer contract for a car insurance policy
C) Contracts for the sale of a company
D) Contracts for exchange and barter

Question 5

Schedule 2 of the UCTA sets out which of the following as relevant considerations when determining whether a contract term is or is not reasonable?

A) The experience of the parties in their respective field
B) The relative strength of the parties' bargaining power
C) The speed with which the contract was made
D) Whether an inducement was received for accepting the particular terms

Question 6

Which of the following are not relevant consideration when determining whether a contract term is or is not reasonable for the purposes of UCTA Schedule 2?

A) Whether a party would or could reasonably have known about the exclusion clause
B) Whether, in a contract for the sale of goods, the goods were being manufactured to order
C) Whether a party is self-employed or has less then 5 years experience in a particular field
D) Whether or not the party uses similar or equivalent terms in their own contract

Question 7

When dealing on written standard which of the following types of exclusion clause will be made subject to the test of reasonableness?

A) A clause that attempt to render a contractual performance substantially different from that which was reasonably to be expected
B) A clause purporting to exclude liability for the death of employees in the performance of the contract
C) A clause which purports to allow the contracting party to render no perforamce at all
D) Any clause which establishes that set penalties must be paid if a particular breach of contract occurs

Question 8

How has the common law traditionally approached terms which seek to exclude or limit liability?

Question 9

What approach is taken by the courts in the construction/interpretation of exclusion clauses?

Question 10

Does the control of exclusion clauses in any sense encroach on the parties freedom to contract on whatever basis they see fit?

Question 11

Does the courts control of exclusion clauses place too much emphasis on 'stereotypical' notions of bargaining power, wrongly making the assumption that an individual or small commercial concern is ignorant and incapable of negotiating a strong position while a relatively larger concern will always be more knowledgeable and keen to exploit their position?

Question 12

To what extent does the case of Photo Production v Securicor recognise that the courts ought to have a 'light-touch' when it comes to regulating exclusion clauses?

Question 13

Should commercial parties simply be left to determine how best to apportion liability?

Question 14

Why might it might be desirable for the UCTA to be interpreted so as to give small businesses the protection afforded to consumers in relation to some contracts for the sale of goods?

Question 15

Does the existence of the UCTA demonstrate that some concept of 'good faith' is alive and well in English concept law?

Question 16

To what extent could it be argued that the courts have taken a consistent approach to the UCTA test of reasonableness?

Question 17

The Unfair Contract Terms Act contains which of the following?

A) The test of reasonableness
B) The test of fairness
C) The test of unfairness
D) The criteria of equity

Question 18

On what basis can the decisions in Zockoll v Mercury and Timeload v BT be distinguished from the decision in Paragon Finance v Nash?

A) The courts considered that the provision of a mortgage was grounds to distinguish the Paragon
B) Paragon was concerned with a financial service of the type exempted by the UCTA
C) Paragon was concerned with a positive obligation under the contract, Zockoll and Mercury were not
D) Zockoll and Timeload were concerned with positive obligations under a contract, Paragon was not

Question 19

The Unfair Contract Terms Act 1977 prevents the exclusion of liability for which of the following under any circumstances?

A) Liability for damage to reputation or standing
B) Liability for the loss or damage sustained by chattels
C) Liability for death or personal injury
D) Liability for the loss or damage sustained by real property

Question 20

A party can introduce an inclusion clause into the contract after contract has been made.

Question 21

A 'course of dealing' between parties may allow a term excluding or limiting liability to be implied into a contract?

Question 22

In Olley v Marlborough Court Hotel the court was asked to consider whether an exclusion clause displayed in a hotel room was incorporated into the contract signed by the hotel guest at the reception desk.

Question 23

A court would consider that there was a 'course of dealing' between parties after two transactions between them in the same year?

Question 24

Exclusion clauses cannot be effective unless they are reproduced in full in every contract?

Question 25

The courts will seek to read an exclusion clause as liberally as possible.

Question 26

In principle, at common law, a well worded exclusion clause could effectively exclude all possible types of liability?

Question 27

The Unfair Contract Terms Act 1977 applies only to contracts between a business and a private individual?

Question 28

The Unfair Contracts Terms Act 1977 could be used to strike out a term in a contract for the sale of a leasehold property?

Question 29

The Unfair Contract Terms Act 1977 could be used to strike out an unfair term in a contract to transfer the copyright in a book to a publisher?

Question 30

The Unfair Contract Terms Act 1977 could be used to challenge a term in a contract for the sale of shares in a company?

Question 31

The Unfair Contract Terms Act 1977 has been interpreted to ensure that in some circumstances, small businesses are treated as if they were consumers when buying goods?

Question 32

A term restricting a right of 'set-off' has been held to be a form of exclusion clause?

Question 33

The Unfair Contracts Terms Act 1977 ensures that consumers are protected to the same extent irrespective of whether they buy, rent or otherwise acquire goods?

Question 34

Which case is often cited as evidence for the proposition that any party who signs a written contract is taken to have accepted any exclusion clauses in that contract?

A) Scrutton v Midland Silicones
B) L'Estange v Graucob
C) Olley v Marlborough Court Hotel
D) Parker v South Eastern Railway

Question 35

The statutory regime which controls exclusion clauses is contained in which Act?

A) The Law of Contract (Micellaneous Provisions Act) 1956
B) The Consumer Rights (Fair Dealing) Act 1996
C) The Unfair Contract Terms (1999)
D) The Unfair Contract Terms Act (1977)

Question 36

Could the UCTA test of reasonableness be said to produce uncertain and unpredictable results?

Question 37

A customer is defined as a 'natural person' in which piece of legislation?

A) Unfair Contract Terms Act
B) Unfair Terms in Consumer Contracts Regulations
C) Sale of Goods Act
D) Consumer Protection Act

Question 38

What is meant by reasonableness in the Unfair Contract Terms Act?

A) That a reasonable person would enter into the contract
B) That a clause is reasonable in the circumstances of the case
C) That mentally ill people cannot sign contracts
D) That both parties need to be competent

Question 39

What test is employed to test contractual terms under the UTCCR 1999?

A) Test of reasonableness
B) Test of acceptability
C) Test of unfairness
D) Test of unreasonableness

Question 40

The UCTA 1977 has what effect on terms purporting to exclude the application of the implied terms in the Sale of Goods Act 1979 for consumers?

A) Makes them void
B) Subjects them to the test of reasonableness
C) Makes some void and subjects some to the test of reasonableness
D) Allows exclusions

Question 41

The Law Commission recommended the following reforms in the area of unfair terms:

A) The replacement of UCTA by UTCCR
B) The replacement of UTCCR by UCTA
C) The replacement of both UCTA and UTCCR by a new statute
D) The continuation of the current system

Question 42

What is the role of the Office of Fair Trading under the UTCCR?

A) To supervise the use of terms in standard form contracts
B) To sue large businesses on the behalf of consumers
C) To sue consumers on the behalf of large businesses
D) To advise the government

Question 43

When is someone considered a consumer under UCTA?

A) When the transaction forms a regular part of their business
B) When the transaction does not form a regular part of their business
C) When a transaction is made between businesses
D) Every time someone buys something

Question 44

A business can deal as a consumer under:

A) UCTA
B) UTCCR
C) Both
D) Neither

Question 45

Section 3 of UCTA subjects written standard terms to the requirement of reasonableness when:

A) The term entitles a party to render a substantially different performance from the one expected
B) The term entitles a party to render no performance at all
C) Either of the above
D) The term is detrimental to the interests of the consumer

Question 46

The Unfair Terms in Consumer Contracts Regulations 1999 apply to what type of contract?

A) Contracts relating to exclusion and limitation clauses only - consumers only
B) Standard form contracts, covering all unfair terms - consumers only
C) All contracts between business and consumer contracts - individually negotiated contracts only
D) Standard from contracts - business contracts only

Question 47

In which leading case did the House of Lords consider the test of "unfairness" contained in regulation 5(1) of UTCCR 1999?

A) Watford Electronics Ltd v Sanderson CFL Ltd (2001)
B) Granville Oil and Chemicals Ltd v Davis Turner & Co Ltd (2003)
C) Regus (UK) Ltd v Epcot Solutions Ltd (2008)
D) Director General of Fair Trading v First National Bank plc. (2002)