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The Validity of Exemption Clauses in Commercial Contracts - A Comparison with Anglo-American Law

Berglund, Axel (2004)
Department of Law
Abstract
This thesis deals with the type of contract terms which normally are referred to as exemption clauses. Through the incorporation of an exemption clause, a seller is able to exempt or limit the liabilities or obligations non-mandatory law otherwise would give him. There is however several restrictions in law which are intended to protect the other party from abuses. First and foremost, courts can exercise general control through the application of rigid rules for allowing exemption clauses to be part of contract terms. However, even if an exemption clause is appropriately incorporated into a contract, statutory as well as non-statutory requirements of fairness may constrain a party from putting forward an exemption clause successfully.... (More)
This thesis deals with the type of contract terms which normally are referred to as exemption clauses. Through the incorporation of an exemption clause, a seller is able to exempt or limit the liabilities or obligations non-mandatory law otherwise would give him. There is however several restrictions in law which are intended to protect the other party from abuses. First and foremost, courts can exercise general control through the application of rigid rules for allowing exemption clauses to be part of contract terms. However, even if an exemption clause is appropriately incorporated into a contract, statutory as well as non-statutory requirements of fairness may constrain a party from putting forward an exemption clause successfully. Specifically, this thesis explores exemption clauses between parties in their course of business. Under what circumstances may a merchant rely on the validity of an exemption clause? Questions related to consumer contracts will not be dealt with. A comparative approach will be used for analyzing differences and similarities between Swedish and Anglo-American law. Even though the principle of pacta sunt servanda still serve as an important foundation for both systems, the complex society of today have made it necessary to employ exceptions to this rule. This tendency is exemplified by, among other things, restrictions in Swedish and Anglo-American law for ''unfair'' or ''unconscionable'' contracts or contract terms, such as exemption clauses which are unanticipated or oppressive. The thesis will explore statutory as well as non-statutory provisions in Swedish, English and American law. Among the statutory provisions in Swedish law, I will examine the application of 36 § AvtL in particular. In the English legislation, I will primarily focus on relevant pieces of the Unfair Contract Terms Act 1977 (UCTA). As far as American law is concerned, the analysis is very much concentrated to section 2-302 in the Uniform Commercial Code (UCC), which deals with so-called unconscionable contract terms. One conclusion is that Swedish and Anglo-American law, despite certain differences, share many important similarities. A dispute about the validity of a certain exemption clause would therefore probably end up the same way no matter if challenged in a Swedish, English or American court. Another conclusion is that businesses in most cases can expect that exemption clauses will be enforced by courts, particularly if the bargain positions are equal among the contracting parties and the contract in question is made in the course of a business. It is however necessary that the exemption clause is formulated in a clear and unambiguous way if the party putting forward the clause wants to be certain that it will be recognized by courts. According to the contra proferentem rule, terms and conditions with an unintelligible language will be interpreted in the least favourable way for the composing party. This essay is focused on questions de lege lata and tries not to explore pros and cons with exemption clauses and their applicability neither in Swedish nor Anglo-American law. Similarly, the thesis is not primarily intended to judge whether it is preferable or not for a party to act in certain ways or not. It merely puts forward questions which may be relevant for the utilization of exemption clauses. (Less)
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author
Berglund, Axel
supervisor
organization
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
Förmögenhetsrätt, Avtalsrätt, Komparativ rätt
language
English
id
1556156
date added to LUP
2010-03-08 15:55:19
date last changed
2010-03-08 15:55:19
@misc{1556156,
  abstract     = {This thesis deals with the type of contract terms which normally are referred to as exemption clauses. Through the incorporation of an exemption clause, a seller is able to exempt or limit the liabilities or obligations non-mandatory law otherwise would give him. There is however several restrictions in law which are intended to protect the other party from abuses. First and foremost, courts can exercise general control through the application of rigid rules for allowing exemption clauses to be part of contract terms. However, even if an exemption clause is appropriately incorporated into a contract, statutory as well as non-statutory requirements of fairness may constrain a party from putting forward an exemption clause successfully. Specifically, this thesis explores exemption clauses between parties in their course of business. Under what circumstances may a merchant rely on the validity of an exemption clause? Questions related to consumer contracts will not be dealt with. A comparative approach will be used for analyzing differences and similarities between Swedish and Anglo-American law. Even though the principle of pacta sunt servanda still serve as an important foundation for both systems, the complex society of today have made it necessary to employ exceptions to this rule. This tendency is exemplified by, among other things, restrictions in Swedish and Anglo-American law for ''unfair'' or ''unconscionable'' contracts or contract terms, such as exemption clauses which are unanticipated or oppressive. The thesis will explore statutory as well as non-statutory provisions in Swedish, English and American law. Among the statutory provisions in Swedish law, I will examine the application of 36 § AvtL in particular. In the English legislation, I will primarily focus on relevant pieces of the Unfair Contract Terms Act 1977 (UCTA). As far as American law is concerned, the analysis is very much concentrated to section 2-302 in the Uniform Commercial Code (UCC), which deals with so-called unconscionable contract terms. One conclusion is that Swedish and Anglo-American law, despite certain differences, share many important similarities. A dispute about the validity of a certain exemption clause would therefore probably end up the same way no matter if challenged in a Swedish, English or American court. Another conclusion is that businesses in most cases can expect that exemption clauses will be enforced by courts, particularly if the bargain positions are equal among the contracting parties and the contract in question is made in the course of a business. It is however necessary that the exemption clause is formulated in a clear and unambiguous way if the party putting forward the clause wants to be certain that it will be recognized by courts. According to the contra proferentem rule, terms and conditions with an unintelligible language will be interpreted in the least favourable way for the composing party. This essay is focused on questions de lege lata and tries not to explore pros and cons with exemption clauses and their applicability neither in Swedish nor Anglo-American law. Similarly, the thesis is not primarily intended to judge whether it is preferable or not for a party to act in certain ways or not. It merely puts forward questions which may be relevant for the utilization of exemption clauses.},
  author       = {Berglund, Axel},
  keyword      = {Förmögenhetsrätt,Avtalsrätt,Komparativ rätt},
  language     = {eng},
  note         = {Student Paper},
  title        = {The Validity of Exemption Clauses in Commercial Contracts - A Comparison with Anglo-American Law},
  year         = {2004},
}