An individual consumer, Mr Wallis, agreed to buy a car from Mr Stanton, but he had to have credit facilities in order to buy it. Consequently, he concluded an hire-purchase contract with a finance company, called Karsales, who bought the car from Mr Stanton. Before concluding the agreement, Mr Wallis checked the car, and he saw that the car was in a good state, new tires and a fitted radio. Nevertheless, when the car was delivered to Mr Wallis, he did not want it anymore. It was because the car was not in the same state as when he had first inspected it, indeed the car was then in a very poor state, unable to run anymore. And it was towed to his premises. Mr Wallis took the decision to refuse to pay the instalments to the finance company. Therefore, Karsales Ltd triggered an action against the hire-purchaser, in view to make him pay the installments due under the agreement, because in the contract it had been inserted an exclusion clause saying that 'No condition or warranty that this vehicle is roadworthy, or as to its age condition or fitness for any purpose, is given by the owner or implied therein'. The case brought an interesting solution to restrict the validity of the exclusion clauses, but it was only one step toward a more effective and fair restriction of these exclusion clauses, which was achieved by the unfair contract termes act, voted in 1977.
[...] This is the reason why the judges had to devise a legal principle called the doctrine of fundamental breach. the fundamental breach's doctrine, the content's study of the clause This doctrine was developed by Lord Denning MR, and was designed to be an additional weapon against exclusion clauses. According to this principle, an exclusion clause will never apply if his effect is a fundamental breach of the contract. So, the judge will have to seek if the clause will induce a fundamental breach of the contract. [...]
[...] Originally there were only two main weapons to attack an exemption clause. First the rules related to his incorporation in the contract. And also the rules related to his interpretation. But it is not enough to protect properly the weaker party, indeed these rules merely allow that the form of the clause is valid, the judge will not control neither the content not the effects. Moreover, the clause will often be duly incorporated in the contract, will be clear and unambiguous. These rules will have consequently a little interest. [...]
[...] Because too much cases where it is possible to avoid it. Beside this principle is not taking in account the difference of situation whether the victim is a consumer or not. This is also showing an other lack of this principle because, in the modern law this distinction is very important, and may change completely a rule. And a case can illustrate it, the Photo production case in 1980, the principle of fundamental breach was not apply in this case because it was a business contract, a contract between two non consumers. [...]
[...] Consequently there is still the risk of insecurity. Even if, in the same fact as the Karsales case, there is a lot of chance that the clause will not be consider as reasonable. To conclude, even if this act has some lack, English law, which is a law based on common law has a specific text to handle this kind of clause, and not the French law, which is still based on some cases, with little authority and not an legislative act. [...]
[...] the doctrine of fundamental breach, an interesting transitory tool against the exemption clauses exemptions clauses, a restricted validity This case is prior to 1977, so at the moment the unfair contract terms Act 1977 was not enacted. So, at first sight parties in a contract where submitted to the risk of an exclusion clause. This kind of clause aims to exclude or limit the liability that might belong to one party in the event of a breach of contract. They are not forbidden because they are the result of the principle of freedom of contract. However this clause can be greatly abusive, as the case is highlighting it. [...]
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