1 What is an exclusion clause?
Transcript: Exclusion clauses
An exclusion clause is a term in a contract which seeks to exclude or limit the liability of one of its parties. For example, it may state that a party has no liability if the contract is breached or, alternatively, seek to limit the range of remedies available or the time in which they can be claimed.
… they are terms whereby one party seeks to disclaim or reduce his or her responsibility under the contract …
Exclusion clauses are found in many different areas of everyday life from car parks and supermarkets to swimming pool changing rooms and train tickets.
Box 1 Tricky terminology for troublesome terms!
Some authors refer to ‘exclusion clauses’ and ‘limitation clauses’ separately (such as Furmston, 2017, Chapter 6). This is because ‘exclusion clauses’ exclude liability altogether, whereas ‘limitation clauses’ only limit it. For example, an exclusion clause might state that no damages are payable for late delivery of a product. A limitation clause might state that damages would be limited to £100 for late delivery.
In addition, some authors use the term ‘exemption clauses’ when referring to one or both of the above. For example, in Anson’s Law of Contract (Beatson et al., 2010, Chapter 6).
If you were drafting or reading a contract which contained an exclusion clause you may well choose not to use any of these terms and simply write down the clause itself. This can make them harder to identify in practice.
In this course, the term ‘exclusion clauses’ is intended to cover both exclusion and limitation clauses. Where there is any legal difference in the way they are treated, this is highlighted.