1.1 When are exclusion clauses used?
Exclusion clauses are often found in standard form contracts, such as those used by utility and mobile phone companies and public transport providers. A standard form contract is a uniform contract which is used by a large organisation in all its dealings with customers. Apart from standard form contracts you will also find exclusion clauses in individually negotiated contracts.
Activity 1 Standard form contracts
Find a copy of an agreement you have entered into with a utility company or mobile phone provider (if you do not have any, go to the web page of a utility or mobile phone company and see if you can find their terms and conditions).
- a.Are the terms and conditions which apply to the contract on the agreement itself? If not, locate the terms and conditions.
You may well have found that the terms and conditions were on the back of the piece of paper you signed. If you entered into the agreement online, you may have ticked a box confirming that you had read the terms and conditions.
- b.Do the terms and conditions include any exclusion clauses?
It is very likely that there are exclusion clauses contained in the terms and conditions. For example, British Gas’s(2015) for the supply of gas and electricity state that it will not be responsible for any financial loss or loss that could not have been reasonably expected. It also limits its liability for any losses to £1 million.
- c.Do the exclusion clauses appear reasonable?
Your answer to this is likely to depend on the wording of the terms and conditions, how broadly they seem to be drafted and what they cover. The term ‘reasonable’ also has a specific meaning in relation to certain consumer contracts. This is discussed in Section 5.4 of this course.