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Validity of exemption clauses in contract – A comparative study of India and England

Validity of exemption clauses in contract – A comparative study of India and England
Dhruti M. Trivedi

2008

Department of Law, Saurashtra University, Rajkot 364 002, INDIA.

ABSTRACT

This thesis also attempts to speak about what is reasonable. As a test, Speidel suggests that after the buyer has established a prima facie case of oppression, the seller should have the burden of proving that the term is commercially reasonable. Spediel test of commercial reasonableness has one major flow. It has been pointed out that all business pursue profits and those tactics which maximize profit are by definition commercially reasonable. The contract model relies upon bargaining to insure the fairness of the exchange: a bargained for clause is commercially reasonable. Speidel must look to other safeguards, but he fails to provide any.

Slawson9 retains the need to inquire into what would have been the result had there been bargaining or at least complete and understandable disclosure of terms. Slawson fails to develop standards for determining which terms should be enforced. His views are that Buyer’s expectation should govern the terms.

Beside all these, there may be other reasons for oppressive contract terms. As Kessler has suggested one cause of oppressive contract may be market concentration or the presence of monopoly power. Unconscionable clauses may also be found among contracts drafted in apparently unconcentrated markets. It may be that low income consumers are too uneducated and ill-informed to act rationally.

The way out of all this difficulty is not a particularly hard one to find. The chief step of course would be to recognize that deviation and quasi-deviation generic and are to be kept distinct from discharge by breach. The second necessary step would be to allow the substantive doctrine of fundamental breach to remain where the Suisse Atlantique case left to it, decently interred. The third step would be to complete the process begun by the House of Lords in that case and more directly to the acceptance of a universal rule that the effect of exemption clause depends in their proper interpretation, and on that alone (questions of travel illegality, and the like, apart.)