Contract Law

In the case of standard contracts, it is not always straightforward to recognize any exemption clauses. For instance, in the case of the supplier, the contract may state that the supplier is not liable to pay any damages in case of a delay in delivery for a specified period beyond the date stated in the contract. In this context, it is important to incorporate exemption clauses as terms under the contract and make it an integral part of the component2. As such, any clause appearing in any other document or communication that states the same purpose is not considered as incorporated and is therefore not accepted as an exemption clause under the contract.In this context, it is important to discuss the issue of whether there is a requirement to stress the meaning of exemption clauses in standard contracts under the law. In order to analyze this, the discussion will make extensive use of the provisions of the ‘Unfair Contract Terms Act 1977’ as well as the ‘Unfair Terms in Consumer Contracts Regulations 1999’.In several cases, a party to the contract does include a term that is meant to exclude or minimize the liability in the event that the contract is breached as mentioned in the above example. In such cases, the term under the contract might read as ‘the (company) will not be liable for any damage caused to the goods after a period of 7 days from the date of dispatch’. In other cases, the terms could be stated as ‘the (company) will not be subject to a liability of more than $50 in the event of a breach of contract’3. In both cases, the party mentioned as (company) is seeking to minimize any losses that may occur due to forces beyond its control and is looking to reduce its liabilities as such.However, such terms of exemption care not always acceptable amongst parties or otherwise, the parties do not manage to reach an agreeable compromise on the contractual terms.