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The Unfair Contract Terms Act 1977 regulates clauses that exclude or limit terms implied by the common law or statute. Its general pattern is that if clauses restrict liability, particularly negligence , of one party, the clause must pass the "reasonableness test" in section 11 and Schedule 2.
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 ...
Dillon LJ held that the exclusion clause would have passed the reasonableness test under UCTA 1977 section 6(3), section 11 and Schedule 2. In fact the company was dealing as a consumer, and therefore section 6(2) applied to make the SGA 1979 mandatory; exclusion was not a possibility.
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 ...
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However, if acts of negligence occur during authorised acts, then the exclusion clauses will still apply. [13] [14] If the contract is for the carriage of goods, if the path is deviated from what was agreed, any exclusion clauses no longer apply. [14] In Australia, exclusion clauses have been recognised as valid by the High Court.
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 ...
It was held that it was not unreasonable for the purchaser of a modest house to rely on the surveyors' evaluation, as it was such common practice. In this way the court extended Hedley Byrne liability to proximate third parties. [2] Under UCTA 1977 an initial issue was the scope of the Act's coverage under s 13. Lord Templeman said the Act ...