freedom of contract versus protection of consumers: examining exclusion clauses in product liability Law

Document Type : Research Paper

Authors

1 Associate professor of Islamic and private law. faculty of law, Shahid Beheshti university,Tehran, Iran

2 LLM (the University of Geneva and the Graduate Institute for International Studies and Development), Master in International trade law, Shahid Beheshti University

Abstract

There is a big controversy among the lawyers about the acceptance of exclusion or limitation clauses as a general principle in tort law. Some of them have rejected the acceptance of this principle with some reasons like the high risk of the clause for the victim and its conflict with the general rules of the contract law and being contrary to public policy and safety and health of the community. Some others believe that these types of clauses are not always contrary to public policy and the safety and health of the citizens and moreover, such clauses can be useful specially because of their role in creation of diversity of transactions and the decrease of production cost like insurance fee and its effect on allocation of risks among the businesses.
In the product liability law, for the existence of economic inequality among  manufacturers and other businesses on one hand and the consumers who don’t have enough skill, experience and facilities to consider the products and determine their real interests on the other hand, putting more restrictions on the insertion and reliance upon such types of clauses is much necessary.
Since, the special protective rules like strict liability have been enacted with the presumption that there is an inequality of bargaining power between interprises and manufacturers in one side and the consumers of the products in the other side, it must be held that the exclusion or limitation clauses cannot deprive rights of the beneficiaries of these rules to benefit from them. also, when the general theories like negligence and breach of warranty are the basis of the action, legislators and courts are reluctant to let the injurer rely on exclusion clauses specially, in the case of consumer products and when the person in case has gotten personal damages, however there is no general rules of restriction there. Also, when there is no restriction on insertion and reliance on such a clauses, they try not to let the injurer benefit from them in practice, with the use of some special rules and regulations in construction and insertion of them.
 

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References

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