its effect. Notice: If the contract is not signed, but merely delivered, (ski lift ticket) reasonable and sufficient notice of the exclusion must be given. To satisfy this notice requirement: The clause must be in a contractual document, i.e. one which a party would assume to contain contractual terms, and not in a document which merely acknowledges payment, such as a receipt. The existence of the clause must be brought to the notice of the other party before or at the time the contract was entered into, not after. The degree of notice required depends on the gravity or unusualness of the clause. Previous dealings: An exclusion clause may be considered incorporated with insufficient notice if there has been a previous course of dealing between the parties on the same terms. Courts Intrepretation to Exclusion Clause: - If it is found that an exclusion clause is part of the contract, it must be interpreted. - The entire contract is reviewed to see whether the clause covers the breach that has occurred. - Liability can be excluded only by clear words. The main rules of construction with respect to exclusion clauses are as follows: Contra preferentem rule = an exclusion clause is construed strictly against the party who drafted it (i.e. court will choose the interpretation that favours the party who did not draft the K). - Especially clear words are required to exclude liability for negligence. Otherwise only contract liability is excluded. Further limitation of Exc clauses = Third parties not protected – A person who is not a party to the contract is not protected by an exclusion clause even if the clause is stated to extend to him/her Exception:- employees if exclusion clause mentions them and the act that caused the damage is in course of employment then clause covers employees. Liquidated damages clause -- If the amount set out in the contract represents a genuine pre-estimate of the loss, the court will allow the plaintiff to recover this sum, without having to prove his/her actual loss. Penalty clause -- If the amount is not an actual pre-estimate of the loss, but is instead an amount used as a threat held over the head of the party to compel performance, it is called a penalty clause, and it won’t be enforced. The other party will be able to recover only the damages it can prove. Chap8BreachOfContracts A breach of contract may occur in the following ways: 1) Failure to perform (textbook calls this express breach/repudiation) 2) Anticipatory Breach: Express repudiation, Implied repudiation. Anticipatory Breach = an express repudiation when a contract is repudiated before the date of performance date. Express repudiation/express breach- the failure or refusal to perform the contractual obligations when they become due. For ex, I have a contract with you to deliver orange, on that day I fail to deliver it. In alternative, on the day of delivery I telephone you and say I cannot deliver the orange. Implied repudiation = (anticipatory breach) repudiation that is not express and must be implied or deduced from the circumstances. For ex, you are to paint my house but you found that you had sold all your paint equip after signing the contract, therefore, I assume that you won’t be able to perform the obligation without the painting equipment. Wrongful Repudiation= If an