What Is Banana's Exclusion Limitation Principle

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2. The exclusion/limitation clauses in the contract with POTL are likely to be valid under English law.
(a) As the contract was signed by POTL and Banana UK Ltd (Banana’s UK subsidiary), and both companies are English companies, the contract is under the Unfair Contract Terms Act 1977 (“UCTA”). According to UCTA, whether the exclusion/limitation clauses in the contract are valid will be influenced by the following factors: the strength of the bargaining positions; the inducement the customer received to sign the contract; whether the customer knew or ought reasonably to had known of the existence and the extent of the term; where the term excludes or restricts any relevant liability if some condition was not complied with, whether it was reasonable …show more content…

the strength of the bargaining positions
Banana is China’s cutting-edge and most profitable online video and gaming company, it has gained huge wealth from its successful game series and it has subsidiaries in developed countries like the UK and the USA. While POTL is a new company with only limited assets. So Banana was in a relatively higher bargaining position, which makes POTL’s exclusion/limitation clauses highly likely to be …show more content…

iv. where the term excludes or restricts any relevant liability if some condition was not complied with, whether it was reasonable at the time of the contract to expect that compliance with that condition would be practicable
The negotiation between the two parties lasted many weeks, and during the negotiation, POTL gave Banana samples of the chips and reduce the price slightly as concessions. Due to the length of time, the court would find it reasonable for Banana, an experienced business party, to have weighed the advantages and disadvantages carefully and made its final decision. So it was reasonable for Banana to accept this term and enter this contract.
v. whether the goods were manufactured, processed or adapted to the special order of the customer
The chips POTL produced in this contract was used exclusively in “thought readers”, which are the special order of the Banana, so it was reasonable to put up these exclusion/limitation clauses, making it probable to be

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