South Square Private Law Seminar: 'Commercial Construction of Exemption Clauses: A New Era?'

Speaker: Dr Stelios Tofaris, University of Cambridge

English courts have traditionally approached exemption clauses with hostility and have used special rules of construction to restrict their scope of application. However, the statutory control of exemption clauses and the advance of the modern approach of contractual interpretation have led to calls for the disappearance of those rules. It is a topical issue how far the rules remain, or should remain, relevant when interpreting exemption clauses. Recent cases suggest that the law is in a process of transition, yet that process is incomplete and uncertain. The paper argues that it is time for the law to fully embrace the ‘commercial construction’ of exemption clauses. This means that the construction of exemption clauses in contracts negotiated between parties of equal bargaining status should be assimilated as closely as possible to the ordinary process of contractual interpretation, and the use of special rules of construction should be kept to a minimum. The result will better correspond with the intention of the commercial parties and ensure greater respect for their freedom to allocate risk as they see fit. The approach advocated in the paper requires revisiting well-established rules of construction in order to ascertain whether they are compatible with ‘commercial construction’ and, therefore, whether they ought to be preserved, modified or abolished.

This seminar is open to all LLM, MCL and PhD students, Faculty members and Faculty visitors.