In contractual matters, the exonerative, limitative or aggravating clauses of liability are valid under the Civil Code. This provision, established as an interpretation of the probable will of the parties, implies the possibility that they may vary the responsibility, reaching, according to some, to suppress it. In effect, after establishing the degree of fault that is answered, according to whether the contract reports benefit to one or the other of the contracting parties or to both, ends by stating that “All of which, however, is understood without prejudice of the express stipulations of the parties. In the limitation clause, the type of damage that is answered ends by stating that” The stipulations of the contracting parties may modify these rules. ” These rules constitute the “free space” that the legal system recognizes the contracting parties so that they can self-regulate the matter. The autonomy of the will would be the principle that sustains them. And as in some cases these clauses imply a waiver they also find protection in the Civil Code.
In the contract where New Co. Ltd agreed with Cool Green Ltd in a contract to install new air conditioning units for a hotel, and after 5 days some air conditioning units exploded injuring the manager and one of the patrons Mrs. Angela Favorleigh. In the contract, there was a limitation clause of £50,000 that limits its liabilities to this amount. Due to the fact that New Co. Ltd did a shoddy job when installing the air conditioners , that consequently blew up and injured Mrs. Angela Favorleigh, her legal redress should be to sue the hotel as a legal person and seek for compensation for her injury. This is because she is in no position to sue the one who installed the air conditioners.
It has been said that the clauses of irresponsibility carry with them, as a natural result, the loss of property that could perhaps have been avoided. The party who is not at risk due to his negligence will normally be less diligent than the one who knows that he will bear the burden of the damages caused by his fault. The clauses of limitation “favor, then, if it could be said, the negligence.
If one of the parties is not obliged, how to talk then, of commitment on your part?. If one party is free in case of non-execution arising from their fault, a benefit would be accepted and provided by the other party, without the serious equivalent with which they counted, since, by hypothesis, the act is for consideration. commitment or its provision, would lack, in its respect, of cause, if it is adopted, according to our way of thinking, the conception of the cause developed by the parties..
Whether Cool Green Ltd can claim compensation for £200,000 loss of business and £ 50,000 for troubles and extra damages
Cool Green Ltd should give proof that New Co. Ltd did a bad job and that is why the company lost £200,000 as a result of closure of the business when the damage occurred resulting to temporarily shutting the hotel. If the negligence is proven , then the limitation clause is no longer binding in the contract and New Co. Ltd will be forced to compensate Cool Green Ltd of this amount.
However, the £ 50,000 that New Green Ltd want to be compensated for what they call extra damages and troubles, they will have to give proof of the extra damages in order to be paid.
For the limitation clause to affect the other party, it is necessary that the latter has accepted it, its source is the consent of the parties. The acceptance can be express or tacit, but in any case it must be conclusive and unequivocal. So it can not be inferred from the mere circumstance that that party has entered the place, parked his car, etc. In doubt, the court should lean towards its non-existence, since the general rule is responsibility and irresponsibility is the exception.
Clauses limiting liability may have as their purpose.- Limit the statute of limitations.Generally recognizes the validity of these agreements, because unlike those that extend the Limitation periods do not imply a waiver. For example, it could be stipulated that the Cool Green Ltd must prove the New Co. Ltd fault, and not the diligence or care that the convention imposes on it.
£200,000 as cost of replacing the air conditioning units paid to Antarctica Ltd
The legal liability is that CoolGreen Limited has liability and should cover the cost. This can only be done if NewCo limited proves that the contractor never acted in good faith, although there was a liability clause signed.
They are those where the irresponsibility of the debtor is rightly agreed in case of non-compliance with its obligation and the non-compensation of any harm derived from it.
Limits of Irresponsibility Clauses
The limits of these clauses are fraud, harm to people, the law and for some also essential obligations.
The company cannot agree in advance the irresponsibility of one of the parties in the event of fraud or gross negligence, as this would mean condoning the future fraud, prohibited by the law. As has been argued case law, the provisions of irresponsibility are valid “with the sole limitation that cannot eliminate the responsibility of the offender who acts with malice or gross negligence. The Civil Code prohibits the cancellation of fraud future, so that an early resignation of the same suffers from an unlawful object, in accordance with the provisions of said body of law and is absolutely null and void. Otherwise, would be ineludible in all contracts releasing clauses of fraud, with the criminal consequences that would be introduced in contractual matters.
Public convenience also demands that it be so. The society has a manifest interest in protecting the physical integrity and the life of its members. This type of clauses would be contrary to public order and morals. Thus, clauses limiting or exonerating liability for damages caused to people (death or injury) are invalid.
The law
Sometimes the same law expressly excludes these clauses. Thus, the Civil Code in declares null and void any agreement in which the seller of the eviction sanitation is exempted, provided that in that pact there has been bad faith on his part. Also the law on consumer protection, as discussed below, does not tolerate irresponsibility clauses.
Essential Obligations
As another limit, although arduously discussed, it is pointed out that a clause limiting the contractor’s liability by reason of a breach of its essential obligation could not be applied, for depriving the party against whom it is enforced. In other words, an irresponsibility clause should be repudiated when it points to an essential obligation.
The cost ofredecoration of the reception is within the limit of the liability clause signed in the contract. Therefore it is important to note that the reception cost will be covered in full due to the price range of the liability contract.
The validity of the stipulations related to the responsibility of the contractor, arises from the general conditions that the law establishes with respect to the contracts, that is, of the things that are distinguished in every convention and that are those of their essence, of their nature or merely accidental.
The problem presented by the essential obligations as a limit to the clauses under study is to determine which obligations or obligations have this character in a particular contract. In some cases that will be a simple task, but in others it will clearly be a matter of their own complex.
The irresponsibility conventions produce the general effects typical of the contract, that is, they become obligatory contractus inter partes, not, on the other hand, for third parties. In a court of law, the burden of proof lies with the plaintiff. NewCo limited has to proof that CoolGreen Limited did not act in good faith while working with the contract. These can be collaborated by Antarticalimited who have been given a chance to remedy the situation.
The generality of the doctrine understands that these clauses deserve a restrictive interpretation given their exceptional nature to the general principle of responsibility, an interpretation that must allude, among other things, to the persons to whom the clause may be opposed, to the facts to which it already refers to its object.
As it is easy to compare empirically there are contracts in which normally the clause of irresponsibility is not accepted voluntarily, but is imposed by one of the parties to the other. This is the case in adhesion contracts, where the stipulation of irresponsibility has become commonplace in many of them, tilting the balance of the contractual relationship in favor of the company.
References
Anson w, Principles Of The English Law Of Contract (Forgotten Books 2015)
Bradgate R, White F and Llewelyn M, Commercial Law (University Press 2012)
Combe M, Commercial Law Essentials (Edinburgh University Press 2013)
Commercial Law (Cavendish 2006)
Cracknell D, Commercial Law (Old Bailey 2004)
Duxbury R, Contract Law (Sweet & Maxwell 2015)
Elliott C and Quinn F, Contract Law
Gevurtz F, Corporation Law (West 2010)
Goode R, Commercial Law (Butterworths 2009)
Halson R, Contract Law (Pearson 2013)
Reddy J and Canavan R, Q & A Commercial Law
Ruff A, Contract Law (Sweet & Maxwell 2014)
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