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DECISION IN CASE House of Lords (all judges agreed with the opinion of Lord Bridge.) Lord Bridge (1) The common law issue That the limitation clause was operative and could effectively limit liability. The wording of the condition was unambiguous in this regard. Limitation clauses do not have to adhere to the strict principles laid down for complete exclusion clauses (see Ailsa Craig (1983)), although they must be clearly expressed and must be strictly interpreted against the party relying on them (contra proferentem). Decision partly supported by the following precedents Photo Production Ltd (1980). Even in cases of fundamental breach, (core) limitation clauses are available to be relied upon by one party. Ailsa Craig (1983). There is a difference of approach appropriate between limitation and exclusion clauses. Limitation clauses do not have to be so strictly interpreted. (2) The statutory issue Even though the clause was enforceable at common law, after considering s 55(4), (5)(a) and (c), Lord Bridge decided that the common law provision was overridden by the statutory obligation in s 55(4) for such clauses to be fair and reasonable otherwise. The clause was therefore unenforceable. The grounds for deciding clause unfair and unreasonable were that: (a) in applying s 55(5)(a), it was clear that in the past appellants had sought to negotiate a settlement that was higher than the price and had not relied on the limitation clause; (b) supply of seed was due to the negligence of appellants sister company; (c) appellant could easily have insured against loss. Obiter dicta (a) The phrase ‘to the extent that’ discussed and said to mean ‘in so far as’ or ‘in the circumstances which’. Section 54(4). Although this is not relevant to this case it is possibly an important obiter dictum. (b) There may be some mileage in discussion concerning whether there can be partial reliance on limitation clauses again. Although this is not relevant to this case, possible important obiter dicta. (c) The phrase ‘in all the circumstances’ in s 55(5) means one should take account of circumstances at and after time of the breach.
DOI link for DECISION IN CASE House of Lords (all judges agreed with the opinion of Lord Bridge.) Lord Bridge (1) The common law issue That the limitation clause was operative and could effectively limit liability. The wording of the condition was unambiguous in this regard. Limitation clauses do not have to adhere to the strict principles laid down for complete exclusion clauses (see Ailsa Craig (1983)), although they must be clearly expressed and must be strictly interpreted against the party relying on them (contra proferentem). Decision partly supported by the following precedents Photo Production Ltd (1980). Even in cases of fundamental breach, (core) limitation clauses are available to be relied upon by one party. Ailsa Craig (1983). There is a difference of approach appropriate between limitation and exclusion clauses. Limitation clauses do not have to be so strictly interpreted. (2) The statutory issue Even though the clause was enforceable at common law, after considering s 55(4), (5)(a) and (c), Lord Bridge decided that the common law provision was overridden by the statutory obligation in s 55(4) for such clauses to be fair and reasonable otherwise. The clause was therefore unenforceable. The grounds for deciding clause unfair and unreasonable were that: (a) in applying s 55(5)(a), it was clear that in the past appellants had sought to negotiate a settlement that was higher than the price and had not relied on the limitation clause; (b) supply of seed was due to the negligence of appellants sister company; (c) appellant could easily have insured against loss. Obiter dicta (a) The phrase ‘to the extent that’ discussed and said to mean ‘in so far as’ or ‘in the circumstances which’. Section 54(4). Although this is not relevant to this case it is possibly an important obiter dictum. (b) There may be some mileage in discussion concerning whether there can be partial reliance on limitation clauses again. Although this is not relevant to this case, possible important obiter dicta. (c) The phrase ‘in all the circumstances’ in s 55(5) means one should take account of circumstances at and after time of the breach.
DECISION IN CASE House of Lords (all judges agreed with the opinion of Lord Bridge.) Lord Bridge (1) The common law issue That the limitation clause was operative and could effectively limit liability. The wording of the condition was unambiguous in this regard. Limitation clauses do not have to adhere to the strict principles laid down for complete exclusion clauses (see Ailsa Craig (1983)), although they must be clearly expressed and must be strictly interpreted against the party relying on them (contra proferentem). Decision partly supported by the following precedents Photo Production Ltd (1980). Even in cases of fundamental breach, (core) limitation clauses are available to be relied upon by one party. Ailsa Craig (1983). There is a difference of approach appropriate between limitation and exclusion clauses. Limitation clauses do not have to be so strictly interpreted. (2) The statutory issue Even though the clause was enforceable at common law, after considering s 55(4), (5)(a) and (c), Lord Bridge decided that the common law provision was overridden by the statutory obligation in s 55(4) for such clauses to be fair and reasonable otherwise. The clause was therefore unenforceable. The grounds for deciding clause unfair and unreasonable were that: (a) in applying s 55(5)(a), it was clear that in the past appellants had sought to negotiate a settlement that was higher than the price and had not relied on the limitation clause; (b) supply of seed was due to the negligence of appellants sister company; (c) appellant could easily have insured against loss. Obiter dicta (a) The phrase ‘to the extent that’ discussed and said to mean ‘in so far as’ or ‘in the circumstances which’. Section 54(4). Although this is not relevant to this case it is possibly an important obiter dictum. (b) There may be some mileage in discussion concerning whether there can be partial reliance on limitation clauses again. Although this is not relevant to this case, possible important obiter dicta. (c) The phrase ‘in all the circumstances’ in s 55(5) means one should take account of circumstances at and after time of the breach.
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