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Hi Mike!
I am having some issues understanding onerous terms as an exclusion clause. Could you please explain?
Thanks.
Onerous terms in a contract are those that, no matter whether you breach or you carry on with the contract, you are going to lose
Assume these points:
Contract entered into in 1 June 2016
Contract to buy goods from mainland Europe
Contract value Euro 10 million, payable in GBPounds on 1 June 2017
Goods to be delivered 1 June 2017When you entered the contract, you faced a prospective amount payable of GBPounds 7,142,857
Now, on due date for payment, you face an obligation of GBPounds 1,629,000 greater than anticipated a year ago
Breach the contract? Pay penalties
Go ahead? Lose GBPounds >1,600,000
The word “onerous” is synonymous with the word “burdensome” and Freddy Mercury sang about it with a line from one of Queen’s hits “Whichever way you turn, you’re bound to lose”
Better?
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