Exam (elaborations)
Contract Law Alevel Practice Exam
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Contract law mid year exam for Alevel, can be used to practice and has answers in it with teachers grade and remarks.
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Section A1. Razia decides to park her car in a car park that she regularly uses. At the entrance to the car
park, there is a large sign which clearly states:
‘No liability is accepted by XYZ Parking for any damage to vehicles howsoever caused. ‘
Thirty metres further on, Razia has to stop at the barrier in order to pay to park. She pays the
required amount into the pay machine. This lifts the barrier and she parks her car.
She then visits a nearby clothing shop where she tells the salesperson that she wants to buy a
waterproof coat to keep her dry in the rain. The salesperson shows Razia several coats which
have the label ‘waterproof’ attached. She chooses one and pays for it.
When Razia returns to her car she finds her windscreen broken. One week later her new coat
does not keep her dry when she wears it in the rain.
Razia seeks compensation from XYZ Parking for the damage to her car but it refuses, arguing
that the clause on the sign at the entrance to the car park protects it from liability. She claims
that she did not see the sign. She also demands a refund for the coat from the shop but the
manager refuses.
Advise Razia of the validity of the exemption clause in the car park and her consumer rights in relation to
the coat.
Ans)
The issue pertaining this scenario is to assess whether Razia can claim compensation or any form of
remedy for the losses sustained by her. Razia’s windscreen has broken possibly because of the
negligence of XYZ Parking. Moreover, the coat that she has purchased does not correspond to the
description of being waterproof. Since Razia is a consumer and is acting outside her trade, craft
profession( s2(3) CRA 2015), both her contracts are Business to Consumer contracts for which an
examination of the Consumer Rights Act 2015 will help shed light on the issues. In addition, the common
law controls of incorporation and construction will also contribute towards assessing the validity of the
exemption clause.
First and foremost, it is evident that XYZ Parking has breached an implied term in the Consumer Rights
Act 2015. S 49 of the act stipulates that when a service is provided, the service provider is expected to
provide the service with reasonable care and skill( Lawson v Supasink Ltd). In the current case, XYZ has
possibly been negligent in failing to supervise the cars parked in the parking lot. XYZ seek to disclaim
responsibility by including a widely drafted exclusion clause at the entrance of the car park. An exclusion
clause seeks to exclude all liability and is often used as a defence mechanism. Such clauses have the
potential to cause injustice by exploiting weaker parties especially consumers. Thus, many judges
, notably Lord Denning have expressed disapproval for such clauses and they are subject to
regulation/controls.
In Razias contract with XYZ Parking, the first issue is whether the exclusion clause at the entrance of the
car park is incorporated into the contract. A clause can be incorporated through signature( L’ Estrange),
previous course of dealing( Spurling v Bradshaw) and reasonable notice. In the current case, the clause
can potentially be incorporated by taking reasonable steps to bring it to the attention of the consumers(
Parker v South Eastern Railway). What constitutes reasonable notice depends on the time of notice,
form of notice and effect of the clause. A clause has to be brought to the attention of the other party
before or at the same time as the contract. This was articulated in the case of Thorton v Shoe lane
Parking where a clause inside a car park was not incorporated since the contract was concluded at the
entrance of the car park. Since the barrier where Razia is required to pay is 30m after the notice with the
clause, the factor of time within reasonable notice is satisfied. In addition, the form of the notice must
be clear and legible ( Sugar v LMS). XYZ’s clause passes this test as well as the sign is large and
prominent. Last but not least, the effect of the clause is to be assessed. The more onerous the clause,
the greater the degree of notice is required as per Lord Dennings red hand rule articulated in Spurling v
Bradshaw. In the current case, the clause is evidently displayed and in all likelihood this clause will thus
be incorporated through reasonable notice.
Next, the common law control of construction, in particular the contra proferentem rule will be applied
to assess whether the clause covers the loss that is XYZ’s negligence. The contra proferentem rule states
that any ambiguity in a clause must be interpreted against the defendant relying on it( Houghton v
Trafalgar). In the current case, Lord Mortons test in Canada Steamship will be applied which requires
any clause seeking to exclude liability for negligence to expressly mention the word negligence or s
synonym to that effect( White v Warrick). The clause above, although widely drafted does not include
negligence and hence in all likelihood a strained construction will be given to it such that it cannot
exclude liability for negligently inflicted loss.
In case the clause passes the common law controls, there is still scope for the application of the
Parliamentary control in CRA 2015. S 62(4) assesses all terms in consumer contracts for fairness. A
clause is deemed unfair if it is contrary to the requirement of good faith and it causes a significant
imbalance in the rights and obligations of the parties to the detriment of the consumer. The clause in
question is transparent and prominent as per s 68 of the CRA 2015. XYZ has put all cards face up on the
table( Interfoto Picture library) and hence the term is not contrary to good faith. Nonetheless, since XYZ
is excluding liability for any damage howsoever caused it does cause a significant imbalance between
the parties ( an outcome different from Parking Eye Ltd v Beavis). Thus as per s 62(1) of the CRA, the
term may not be binding upon Razia if it is deemed unfair.
Next, it is imperative to assess Razia’s consumer rights in relation to the coat described as water proof.
The implied conditions in s10 and 11 of the CRA 2015 have been breached by the store selling the coat.
S 10 specifies that the goods sold to a consumer must be reasonably fit for the purpose. This is
particularly so when the consumer has communicated the purpose. In Grant v Australian Knitting Mills,
the underpants sold to the consumer caused a painful skin disease and were deemed unfit for their
purpose. In addition to this, s 9(3) of the CRA also includes in the assessment of the quality of the goods
the purpose as a factor. Thus, the coat has also breached s 9 of the CRA which requires all goods to be of
satisfactory quality. S 11 of CRA specifies that goods sold by description must correspond to the
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