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Exception clauses: exclusionary or definitional? It depends!
Journal of Contract Law, Volume: 2012, Issue: 29, Pages: 47 - 73
Swansea University Author: Elizabeth Macdonald
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The traditional approach to exception, or exemption, clauses is that they exclude liability which would otherwise arise. However, this has been questioned, most notably, fifty years ago, by Coote, on the basis that clauses which exclude liability are not a distinct type of clause, but merely part of...
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The traditional approach to exception, or exemption, clauses is that they exclude liability which would otherwise arise. However, this has been questioned, most notably, fifty years ago, by Coote, on the basis that clauses which exclude liability are not a distinct type of clause, but merely part of the definition of the obligation: the basic idea is that there is no right if there is no remedy. However, despite this powerfully persuasive logic, the courts have often continued to assume that such clauses have a distinct existence, and legislation, such as the Unfair Contract Terms Act 1977, presupposes that is the case. Some reconciliation of that logic with the persistence of the idea of the existence of exclusion clauses should be attempted. The argument that exclusion clauses are simply definitional is premised upon an internally consistent system, and it is contended that, fifty years on, it has become clear that that is not always the case. It is argued that exclusion clauses can be identified though recognising the compromises which are made by the operation of some rules, and contrasting the view of the rights which would be enforceable on the facts as they are, and which actually are enforceable on the facts the compromises treat as existing.
accepted for publication 7th March 2012 on Journal of Contract Law
Hillary Rodham Clinton School of Law