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Based on common law rules for certain types of contracts – eg. “reasonable notice” of termination for employment contracts•Legislation requires a term to be added to a contract – eg. implied terms for sales of goods transactions under Sale of Goods ActInterpretation of express terms•What if parties disagree on the meaning of an express term?•General Rule: How would a reasonablebusiness person in the parties’ position have interpreted the express term?•What is reasonable???1.Start with the plain meaning of the words (i.e. the literal approach). Look at the common dictionary meaning. Golden rule says that words will be given their plain, ordinary meaning unless to do so would result in absurdity.
2.If the plain meaning leads to absurdity, let’s apply:oContextual approach – look at parties’ intentions and surrounding circumstancesContra proferentum rule – apply the meaning that is least favourable to the party who drafted the contract (ie. Interpret in favour of party who did not draft the contractSTANDARD FORM AGREEMENTSGeneral Rule: If a customer signs a contract or clicks “I Agree” online, the customer is boundby the terms of the contract, even if the customer did not read or understand the terms of the contract. Exceptions: 1.If the term is “onerous or unusual”, thecustomer must be given reasonable notice and reasonable opportunity to understand what he was signing. (Tilden v. Clendenning)2.If the term is a limitation or exclusion clause, the term must be (a) clear and unambiguous, (b) reasonable notice to the affected party, (c) acceptance by the affected party, and (d) it is not “unconscionable” or “unfair”.Onerous and unusual terms require:oReasonable notice to the customer, andoReasonable opportunity for the customer to understand and appreciate what he was signingEXCLUSION CALUSESUsed to eliminate or reduce potential liability•may exempt party entirely: eg “not liable for any loss”•may exclude certain liability: “not liable for carelessly caused damage”•may cap damages: eg “liability limited to $500” •Requirements for Validity of Exclusion ClauseoTerm must be clear and unambiguous•ambiguities interpreted against drafteroReasonable notice to affected party •See Tilden v. ClendenningoAcceptance by affected party •Written signature, verbal statement, “I agree” click, or other conductoNot “unconscionable” or “unfair”BOILERPLATE CLAUSESForce Majeure Clause•No breach of contract if a party cannot perform contract due to an event beyond the party’s control.•Example:1.1 Definition of Force MajeureIn this Clause [ ], "Event of Force Majeure" means an event beyond the control of the Authority and the Operator, which prevents a Party from complying with any of its obligations under this Contract, including but not limited to:
1.1.1 act of God (such as, but not limited to, fires, explosions, earthquakes, drought, tidalwaves and floods);1.1.2 war, hostilities (whether war be declared or not), invasion, act of foreign enemies, mobilisation, requisition, or embargo;1.1.3 rebellion, revolution, insurrection, or military or usurped power, or civil war;1.1.4