EXEMPTION CLAUSES ( contract ) Essay Example | Topics and Well Written Essays - 1500 words

EXEMPTION CLAUSES ( contract ) - Essay Example It quickly became clear that the car is seriously defective and that it will cost at least  £1000 to deal with the problems. Thomas Co always offer to those who buy cars from them, the opportunity to purchase a service contract covering parts and labour on the car purchased for 2 years. Smith Co have always declined such offers from Thomas Co. The conclusion of this paper is meant to give advice to Smith Co., hence, the main issue here is whether or not Thomas Company could be held liable for the damage in excess of the  £100 on defective car purchased by Smith Co. considering the presence of the limitation of the liability as indicated in the contract. To settle this main issue I may use the three tests and they are incorporation, construction and UCTA. To determine whether the provision of the contract containing the clause: ‘Thomas Co limits its liability for any breach of the terms implied by ss13-15 of the Sale of Goods Act 1979 to  £100’ would be deemed incorporated or part of the contract; and therefore should bind the parties in the contract, there is a need to examine the facts if they are consistent on the present status of the law. Case facts tell us that Smith Co has made a number of similar purchases of cars from Thomas Co in the past. Although normally, Thomas Co asks its customers to sign its standard terms, containing the standard clause of limiting liability, the case at bar, the purchase by Smith Co was agreed over the telephone and Smith Co were never asked to sign the standard terms. Hence the logical issue is: Was the verbal agreement made orally a continuation of previous transactions of Smith Co with Thomas Co. where there was the limiting clause? Can we imply that Smith Co. should be covered by the standard clause of limited liability considering that it is the practice of Thomas to ask its customers to sign its standard terms? It is may be argued that the purchase made