Business Law

Contract law is the law that governs the formation of contracts between parties. Usually a contract is a legally binding agreement so that if any party to the contract violates in any one or more of the terms of the contract then the other party can take him to court seeking compensation. A contract has various terms which are agreed upon by the various parties to the contract. In addition every contract will normally have particular clauses that make particular provisions especially in regard to responsibility.

One such clause that is found in contracts is the exclusion clause also known as the exemption clause which is the subject of our discussion. Some of the issues that this paper seeks to examine are; what actually amounts to an exclusion clause, how soon this clause ought to be brought to the attention of the other party and other issues that the court will usually look at to determine whether or not to consider a particular clause in a contract as a proper exclusion clause.

An exclusion clause is basically a clause that is included in a contract with the main intention of restricting rights of one of the parties to the contract. A good example is usually in car parks where the owner of the car park puts a notice that reads,” The management of this car park will not be held liable or responsible for any risk that may occur. Owners are therefore advised to park their vehicles at their own risk” Such a clause is basically meant to help the owner of the parking lot escape liability should any damage occur.

Courts have always interpreted that for exclusion clause to be held valid it must be part of the contract. It therefore must be incorporated in the contract. There are various ways in which an exclusion clause is made part of the contract. One way of incorporating an exclusion clause into contract is by way of signature. In the case of L’Estrange vs. Graucob it was held that if the exclusion clause is part of a written document that has been signed by all parties to the contract, then it is deemed to be a part of the contract and is therefore binding.