Unfair Contract Terms 1977
Governs exclusion clauses of contracts, and does so by looking at the form of the clause
rather than the substance.
No general rule of unconscionability in English law, if a clause is outside of the jurisdiction of
the Act
Protection for non-consumers against businesses. Business include government
departments, local/public authority.
Liability for Negligence
Section 2 - Negligence liability
(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 (disease or physical/mental impairment) resulting from negligence. VOID
(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. REASONABLENESS TEST
(3) Where a contract term or notice purports to exclude or restrict liability for negligence a
person’s agreement to or awareness of it is not of itself to be taken as indicating his
voluntary acceptance of any risk.
The scope of this includes contractual notices attempting to exclude liability.
Section 1 – Negligence is defined as:
a) of any obligation, arising from the express or implied terms of a contract, to take
reasonable care or exercise reasonable skill in the performance of the contract;
b) of any common law duty to take reasonable care or exercise reasonable skill (but not
any stricter duty);
c) of the common duty of care imposed by the M1 Occupiers’ Liability Act 1957 or the M2
Occupiers’ Liability Act (Northern Ireland) 1957.
Does not apply to exclusion of STRICT LIABILITY, only NEGLIGENCE .
Negligence is defined as breach of duty so jurisdictional issues have risen where a party
claims the exclusion clause is a clause that defines the obligation of the parties and is not
within the scope of the Act BUT section 13(1) of the act extends the scope of section 2 to
certain duty-defining clauses. Which duty defining clauses it covers and which it doesn’t is
still to be determined, confusion surrounding this.
o Phillips Products Ltd v Hyland [1987] - Defendants hired a JCB bulldozer and driver
to claimant and excluded their liability from any damage caused by the driver’s
negligence.
Driver crashed into claimant’s wall and they sued for damages.
Defendant argued there was no negligence under s 1 (1)(b) because there
was no breach of their obligation as they had not taken the obligation upon
themselves.
Judge held that s 13 of the Act covered condition 8 even if it was a duty
defining clause.
S 13 extends the scope of s 2 to encompass ‘terms and notices which
exclude or restrict relevant obligation or duty’
o Thompson v T Lohan Ltd [1987] – Driver’s negligence caused death of Mr.
Thompson
Governs exclusion clauses of contracts, and does so by looking at the form of the clause
rather than the substance.
No general rule of unconscionability in English law, if a clause is outside of the jurisdiction of
the Act
Protection for non-consumers against businesses. Business include government
departments, local/public authority.
Liability for Negligence
Section 2 - Negligence liability
(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 (disease or physical/mental impairment) resulting from negligence. VOID
(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. REASONABLENESS TEST
(3) Where a contract term or notice purports to exclude or restrict liability for negligence a
person’s agreement to or awareness of it is not of itself to be taken as indicating his
voluntary acceptance of any risk.
The scope of this includes contractual notices attempting to exclude liability.
Section 1 – Negligence is defined as:
a) of any obligation, arising from the express or implied terms of a contract, to take
reasonable care or exercise reasonable skill in the performance of the contract;
b) of any common law duty to take reasonable care or exercise reasonable skill (but not
any stricter duty);
c) of the common duty of care imposed by the M1 Occupiers’ Liability Act 1957 or the M2
Occupiers’ Liability Act (Northern Ireland) 1957.
Does not apply to exclusion of STRICT LIABILITY, only NEGLIGENCE .
Negligence is defined as breach of duty so jurisdictional issues have risen where a party
claims the exclusion clause is a clause that defines the obligation of the parties and is not
within the scope of the Act BUT section 13(1) of the act extends the scope of section 2 to
certain duty-defining clauses. Which duty defining clauses it covers and which it doesn’t is
still to be determined, confusion surrounding this.
o Phillips Products Ltd v Hyland [1987] - Defendants hired a JCB bulldozer and driver
to claimant and excluded their liability from any damage caused by the driver’s
negligence.
Driver crashed into claimant’s wall and they sued for damages.
Defendant argued there was no negligence under s 1 (1)(b) because there
was no breach of their obligation as they had not taken the obligation upon
themselves.
Judge held that s 13 of the Act covered condition 8 even if it was a duty
defining clause.
S 13 extends the scope of s 2 to encompass ‘terms and notices which
exclude or restrict relevant obligation or duty’
o Thompson v T Lohan Ltd [1987] – Driver’s negligence caused death of Mr.
Thompson
