Exclusion Clauses 2 • Common Law • Incorporation Tests include signature, timing, nature of the document, reasonable notice, nature of clause. • Construction – Contra proferentem rule – Negligence must be specifically excluded - The more serious the breach the more specific the exclusion must be- Photo Production Ltd v Securicor (1980) • Statutory Controls • Unfair Contract Terms Act 1977 (UCTA) • Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR) UCTA 1977 • • Concerned primarily with 'business liability' – ' ... breach of obligations arising (a) from things done or to be done in the course of a business ... or (b) from the occupation of premises used for the business purposes of the occupier.' - s 1(3) – 'Business' includes professions, government departments, local government, public authorities - s 14 – Is a university or a charity a business? • UCTA 1977 - negligence liability • S 1(1) - covers tortious negligence and contractual negligence • S 2 (1) 'A person cannot by reference to any contract term or to a notice given to persons generally or to particular persons exclude or restrict his liability for death or personal injury resulting from negligence.' (2) • 'In the case of other loss or damage, a person cannot so exclude or restrict his liability for negligence except in so far as the term or notice satisfies the requirement of reasonableness.' • Strict liability in contract • UCTA, s 3 - applies where one party deals – As a consumer; OR – On other's written standard terms So: • Jack buys a yacht from Shipmakers Ltd on non-standard terms - s 3 applies; • Bigbucks Ltd contracts with Smallfry Ltd on Smallfry's standard terms - s 3 applies . . Effect of Section 3 " ... as against that party, the other cannot by reference to any contract term: (a) when himself in breach of contract, exclude or restrict any liability of his in respect of the breach; or (b) claim to be entitled: (i) to render a contractual performance substantially different from that which was reasonably expected of him; or
(ii) in respect of the whole or any part of his contractual obligation, to render no performance at all, except in so far as (in all of the cases mentioned above in this sub-section) the contract term satisfies the requirement of reasonableness.' . . Requirement of reasonableness UCTA s.11(1) - 'Fair and reasonable' to include in the contract • s. 11(4) where the clause limits monetary liability, consideration should be had to: Resources available to defendant - Availability of insurance – . . s. 11(5) - burden of proof on defendant Schedule 2 - applies to supply of goods contracts (ss 6 & 7), but, can be used more widely in determining reasonableness • Schedule 2 - relevant factors • Strength of bargaining position – NB Snookes v Jani-King (2006) . . Did claimant receive an inducement (e.g discount) to agree to clause? Claimant's knowledge of the term and