2021 01 16 Module 3

Contract law centers on the classification of terms—conditions, warranties, and innominate terms—and the strategic use of exemption clauses as a defense against claims of negligence, misrepresentation, or breach. Exemption clauses must satisfy three critical tests: incorporation into the contract via signature or notice, precise interpretation of wording, and compliance with the Control of Exemption Clauses Ordinance (CECO). The CECO serves as a vital consumer protection mechanism, rendering certain clauses void or subject to a reasonableness test, particularly regarding negligence causing personal injury. Furthermore, misrepresentation—defined as a false statement of fact inducing a contract—renders agreements voidable. Claiming negligent misrepresentation is strategically advantageous due to the reversal of the burden of proof under the Misrepresentation Ordinance and the controversial application of damages equivalent to fraudulent misrepresentation, often referred to as the "fiction of fraud."