Topic

The Case of Broadway Builders Pty Ltd :Memorandum of Advice

Instructions

Write an essay paper that focuses on Memorandum of Advice focusing specifically on The Case of Broadway Builders Pty Ltd

Answer Preview

Can Broadway Ltd depend on the implied Exclusion clause to avoid liability for consequential loss?

An exclusion clause in a contract excludes or limits an individual’s legal accountability for a breach of contract. Nonetheless, for an exclusion clause to be operable and binding upon the parties to the contract the clause must pass the test of construction. Construction in this case refers to the capability of the exclusion clause to cover the loss that has been incurred. The general rule is that an exclusion clause should only be interpreted on its ordinary and natural meaning, in accordance with the case of George Mitchell (Chesterhall) Ltd v Finney Lock Seeds[1]. Secondly, the clause has to be integrated into the contract as a term. In addition, the clause should not be construed as unenforceable based on statutory regulations. Exclusion clauses are significant tool when it comes to allocating the risks of contract amid the parties, and they allow for commercial efficacy. There are different forms of exclusion clauses, in this case an exclusion clause was supposed to be inserted in the contract to bar legal responsibility for consequential loss in relation to anything in contractual obligations.

[1] (1983) 2 AC 803

Word Count: 2300