ABSTRACT
When drafting a contract the parties should consider what will happen if either of them breaks a term of the contract. The consequences of such a breach have already been examined in the chapter on ‘Terms of the contract’ and will be discussed further below in the chapter on ‘Remedies for breach of contract’. This chapter deals with the common law aspects of exemption clauses (exclusion clauses) found in contracts. The purpose of an exemption clause is to exempt, or limit, the liability of a party who breaks a term of the contract. The courts have an inherent dislike of exemption clauses and so have been very strict in the interpretation of such clauses. This chapter examines whether an exemption clause has been incorporated into a contract, whether that exemption clause is actually effective and finally if that exemption clause, although validly incorporated into the contract, has been rendered invalid or inoperative for some reason.
