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The Unfair Contract Terms Act 1977 is the first main Act, which covers some contracts that have exclusion and limitation clauses. For example, it will not extend to cover contracts which are mentioned in Schedule I, consumer contracts, and international supply contracts.
Indemnity clauses. s4, A party dealing as a consumer cannot contract to indemnify a third party on behalf of the other party, except insofar as it satisfies the requirement of reasonableness. Sale of goods . s6(3), Implied terms as to description, quality and sample ( Sale of Goods Act 1979 ss 13–15) may only be reasonably excluded where ...
Finney Lock Seeds Ltd agreed to supply George Mitchell (Chesterhall) Ltd with 30 lb of Dutch winter cabbage seed for £201.60. An invoice sent with the delivery was considered part of the contract and limited liability to replacing 'any seeds or plants sold' if defective (clause 1) and excluding all liability for loss or damage or consequential loss or damage from use of the seed (clause 2 ...
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Before the Unfair Contract Terms Act 1977, the courts had not developed a jurisdiction to strike down unfair terms. When faced with harsh exclusion clauses they would often "interpret their way out" of the plain meaning of the clause through a process of strict construction against the party relying on a clause (in Latin, contra proferentem ...
Slade LJ rejected Hamstead Plant Hire’s argument. Condition 8 was caught by UCTA 1977, and was unreasonable in excluding its liability for Mr Hyland's damage. When deciding what breach there is, the court should not include the exclusion clause in deciding whether a breach existed.
An exemption clause in the contract for the car provided that the implied conditions about fitness for purpose were excluded. R&B argued that this was contrary to UCTA 1977 section 6, and United Dominions contended that R&B could not avail themselves of the Act because as a business they could not count as a consumer.
Between two businesses dealing as commercial parties of equal bargaining strength, this term could be excluded. But when one party is a consumer, the Unfair Contract Terms Act 1977 section 6(2)(a) stipulates that the warranty about fitness cannot be excluded. So Graucob would have been in breach of contract for providing a faulty machine in any ...