SEM 2, LECT 5 - EXCLUSION CLAUSES 2 - CONTRACT 31/01/2020 Statutory Controls - Unfair Contract Terms Act 1977 (UCTA)- now applies only to Business to Business Contracts. - Consumer Rights Act 2015- which replaces the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR). UCTA 1877 - Concerned primarily with 'business liability' o ' ... 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.' - sec 1(3) o 'Business' includes professions, government departments, local government, public authorities - sec 14 UCTA 1977 - negligence liability - Sec 1(1) - covers tortious negligence and contractual negligence. - Sec 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. - Sec 2 (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, sec 3 - applies where one party deals on the other's written standard terms. Example: - o Bigs Ltd contracts with Smalls Ltd on Smalls Ltd's standard terms - sec 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: o (i) to render a contractual performance substantially different from that which was reasonably expected of him; or o (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.' - You can only exclude on breach of contract if it satisfies the requirement of reasonableness Requirement of Reasonableness - UCTA sec 11(1) - 'Fair and reasonable' to include in the contract. - Sec 11(4) where the clause limits monetary liability, consideration should be had to: o Resources available to defendant o Availability of insurance - Sec 11(5) - burden of proof on defendant (of whether the clause is reasonable or not) - Schedule 2 factors- 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. o Watford Electronics Ltd v Sanderson CFL [2001] - Did claimant receive an inducement (e.g discount) to agree to clause? - Claimant's knowledge of the term and its extent. - Reasonable to comply with condition which, if not complied with, leads to exclusion o e.g time limit for complaint- RW Green Ltd v Cade Brothers Farms