Liability for negligence is covered under s. 1(1) where it states
- failing to take reasonable care in carrying out a contract; or
- failing to meet a common law duty of care (i.e., tort); or
- failing to meet the duty of care under the Occupiers’ Liability Act 1957.
Section 2 restricts the ability of one party to exclude his liability for negligence. By reference to any contract term or a notice, he cannot exclude or restrict his liability for death or personal injury resulting from negligence.
Section 3 of the UCTA 1977 deals with liability in contract whereby it specifies that one party cannot exclude or restrict his own liability for breach of contract or render any performance substantially different from that expected of him, or render no performance at all, except in so far as the term satisfies the test of reasonableness providing one party is dealing as a consumer or on the other’s ‘written standard of terms of business’.
Section 6 provides that the statutory implied obligations as to quality, fitness for purpose, etc., in sale and hire-purchase contracts cannot be excluded or restricted by reference to any contract term as against someone ‘dealing as a consumer’, but for non-consumers the exclusion is possible if the clause passes the reasonable test.
With the main exclusion clauses defined, we need to address the question with regards to how the UCTA 1977 deals with these exclusion clauses. The reasonable test is central to the operation of the Act in that if the exclusion clause does not pass this test, it is void. It is for the person relying on the clause to prove that the clause is reasonable. The test emphasises that exclusion clauses may be negotiated between the parties and therefore represent their allocation of risks rather than being imposed as in contracts of adhesion. Reasonableness is to be assessed at the date of making the contract, not the date of breach. In determining for the purpose of s.6 or s.7, whether a contract term satisfies the requirement of reasonableness, regard shall be had to:
- The strength of the bargaining position of the parties relative to each other;
- Whether the customer received an inducement to agree to the term and had an opportunity of entering into a similar contract with other persons but without having to accept similar terms;
- Whether the customer knew, or ought reasonably to have known of the existence and extent of the term;
- Where the exclusion is conditional, whether it was reasonable to expect that compliance with that condition would be practicable;
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Whether the goods were manufactured, processed, or adapted to the special order of the customer.
An example of the operation of reasonableness test can be provided by reference to the case of Phillips Products Ltd v Hyland and Hamstead Plant Hire Co Ltd [1987] 2 All ER 620.
‘Law Of Contract’ Ian Brown & Adrian Chandler
Law Of Contract’ Ian Brown & Adrian Chandler
‘Contract Law’ Cavendish Lawcards Series,