Banana Cola Case Study

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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
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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 valid. ii. the inducement the customer received to sign the contract
As it was mentioned in the facts, there are only two companies that have this technology of converting the brain waves, and the other is in South Korea. Under such circumstances Banana did not have to sign this contract with POTL, instead it has the freedom to choose the other company. As a result, we cannot say Banana had great inducement to sign the contract with POTL, the exclusion/limitation clauses are also not compulsory for Banana. iii. whether the customer knew or ought reasonably to had known of the existence and the extent of the term
The exclusion/liability clauses are stated clearly in this contract which were signed by both parties, therefore it is reasonable to say that the customer, Banana knew or ought reasonably to had known of the existence and the extent of the
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In this case, when one party providing the standard terms is in breach of contract and wants to depend on this term, it should render a contractual performance substantially different from that which was reasonably expected of him, or; in respect of the whole or any part of his contractual obligation, to render no performance at all, except in so far as (in any of the cases mentioned above in this subsection) the contract term satisfies the requirement of reasonableness. To pass the reasonableness test, the clause must be fair and reasonable in the circumstances which were, or ought reasonably to have been, known to, or in the contemplation of, the parties on entry into the contract. There are many factors to be considered by the Courts

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