How to exclude liability — drafting exclusion clauses
When things go wrong, a well-drafted exclusion clause could make all the difference. What should you be aware of when you are drafting or reviewing these clauses?
Exclusion clauses come in many different forms: they might try to prevent or restrict the type of loss a party can claim in the event of a breach; they might cap the value of claims that can be made under the contract to the contract price or licence fee; they might exclude all remedies other that those provided for in the contract itself. Whatever they do, it is essential that exclusion clauses are properly incorporated into the contract, that they comply with the statutory framework set out in the Unfair Contract Terms Act 1977 and the Unfair Terms in Consumer Contracts Regulations and that they are clearly drafted.
As with any contract term, if it is not in the agreement you cannot rely on it. While exclusion clauses are commonplace, they are not terms the court will imply into an agreement. If you want to rely on these clauses, make sure you can demonstrate they are agreed. You should always ensure these clauses are contained in a written agreement, ideally with a suitable heading so the other party can find them, and that the document is signed. Failing that, put them in an order acknowledgement that is sent out to the customer before any work is undertaken. You cannot incorporate terms by simply placing them on the back of an invoice that is sent out after the contract has been concluded…
If you are registered and logged in to the site, click on the link below to read the rest of the Mills & Reeve briefing. If not, please register or sign in with your details below.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from The Lawyer
Analysis from The Lawyer
The trend for unbundling legal work is advancing through the law firm ranks but there is still resistance in some quarters - namely in-house. We asked why