Exclusion of Liability through Exemption Clauses: The Permissible Extent
School of Law, CHRIST (Deemed to be University), India
Volume II – Issue II, 2020
“Starting, as from one terminus of history, from a condition of society in which all the relations of Persons are summed up in the relations of Family, we seem to have steadily moved towards a phase of social order in which all these relations arise from the free agreement of Individuals”, said Sir Henry Maine. Dominating the global market with the doctrine of the freedom of the will, the laissez faire economy changed the world view on how their businesses should operate. Parties were given choice to introspect their commercial interests and form their own contracts. With the freedom to incorporate almost any clause into their contracts, with the further added rapid industrialisation, it was just until a matter of time when standard form of contracts left a dearth in the bargaining power of the consumers, most especially common while excluding contractual liability.
Contractual law states that parties are bound by the clauses, they have consented to, and only to the extent provided for, even if such consent was given while someone was absent minded. However, to the relief of the consumers, the Judiciary has sought to lean towards a more welfare oriented approach. By devising canons of contra proferentum and fundamental obligation, the Courts exclude themselves from otherwise applying the general rule of strict interpretation of the contract, when the terms are carefully placed at the extreme disadvantage of a consumer.
The author while analysing into the judicial doctrines, will further dwell into how the countries of England and the United States, along with India, have responded to the emergence of unreasonable exclusionary terms, to highlight the varied consumer welfare approaches applied by these countries.