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Exclusion clauses

A question of construction: liability caps and building contracts

Leah Fisher

In Arcadis v AMEC, the Court of Appeal held that a liability cap had been incorporated into a letter of instruction. AMEC, a specialist concrete contractor, employed Arcadis, an engineering outfit, to help design two construction projects: the Wellcome Building and Castlepoint car park. A detailed Protocol Agreement was exchanged but never finalised. Work was Read More

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All liability exclusion neither onerous nor unreasonable

Crawford Jamieson

In Goodlife v Hall Protection, the Court of Appeal held an all liability exclusion clause was neither onerous nor unreasonable. Goodlife bought a fire suppression system from Hall Fire. Despite the purchase, Goodlife suffered a devastating fire. Hall Fire’s standard conditions excluded all liability whatsoever for failure of the safety equipment. Goodlife argued that it Read More

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Have no reliance on non-reliance? Clauses excluding misrepresentation must be reasonable.

Jon Turnbull

When commercial parties contract, they usually want to restrict their potential liabilities to the four corners of the document. The law sometimes has other ideas. Misrepresentation is a classic example. Liability for misrepresentation can be excluded by commonly found “non-reliance” clauses (often found within an entire agreement clause). These clauses set up a contractual estoppel; Read More

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An unfair relationship? Bank’s basis clauses upheld

Sophie Walker

In Carney v Rothschild, the High Court considered the efficacy of “basis clauses” in the context of a financial mis-selling claim in which it was alleged that an unfair relationship under the Consumer Credit Act 1974 had arisen. The claimants, four British expats living in Spain, had borrowed funds from the bank, secured against their Read More

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Your exclusion clause won’t benefit from hindsight

Samantha Holland

In Nesbit Law v Acasta Insurance the Court of Appeal held that an insurer could not rely on an exclusion clause in order to avoid paying out under its policy. The claimant personal injury solicitors were members of a funding scheme run by the defendant insurer and a bank. On joining the scheme the solicitors’ Read More

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Exclusion clauses work

Lucy Judge

In Interactive E-Solutions v O3B, the Court of Appeal has, yet again, held that a widely drafted exclusion clause represented the allocation of risk between the parties. A dispute arose when Interactive refused to pay service fees due to O3B under a contract, and O3B purported to terminate the contract. Interactive brought an action for Read More

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Limiting liability under your contract

Jason Rix

Last month, a group of us (Erwan Poisson, Joost Everaert, Julie Metois, James Freeman and I) gave some training on limiting liability in commercial contracts. So far so unsurprising. The sting in tail was that we were covering the topic under Belgian, French and English law. This served to highlight some legal and cultural differences Read More

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Uncertain but not unenforceable

Emily Davies

In Royal Devon and Exeter NHS Foundation Trust v ATOS IT Services, the court found that (i) an ambiguous limitation of liability clause was enforceable and (ii) damages for wasted expenditure were distinguishable from damages for loss of profits. The Trust engaged ATOS to provide information management services. Unhappy with the performance of the system, Read More

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Is it worth negotiating? Clarification of “written standard terms of business” under UCTA section 3

Po-Siann Goh

In African Export-Import Bank v Shebah Exploration & Production Company, the Court of Appeal confirmed the test for when negotiation and amendment of “written standard terms of business” will preclude application of the reasonableness requirement in section 3 of the Unfair Contract Terms Act 1977 (UCTA). Section 3 of UCTA subjects certain exclusion clauses to Read More

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Careful what you wish for. Contractually agreed remedies, if sufficiently clear, can exclude common law remedies

Julius Handler

In Scottish Power v BP Exploration, the Court of Appeal considered whether contractually agreed remedies contained in long-term North Sea gas sales agreements should be construed as excluding common law remedies. Scottish Power sought damages from the Sellers, which breached their obligation to deliver gas. At first instance, Leggatt J agreed with the Sellers that Read More

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