COMMERCIAL PRACTICE L4 - Sga & ucta - REASONABLESNESS TEST

Question 1

What must an exclusion or limitation clause be in order to be valid? (1)

Answer 1

Reasonable.

Question 2

What do S11(1) and S11(2) UCTA 1977 require when considering whether a clause passes the reasonableness test? (1)

Answer 2

Consideration of the factors in Schedule 2 UCTA.

Question 3

What does Schedule 2 UCTA 1977 contain|? (3)

Answer 3

A non-exhaustive list of factors which a court must have regard to when assessing whether or not an exclusion and / or limitation clause is reasonable. These factors include the bargaining strength of the parties and whether the buyer knew or ought reasonably to have known about the term.

Question 4

When are the factors in S11(4) UCTA 1977 relevant? (1)

Answer 4

When the clause is a limitation clause seeking to set a monetary cap on the amount that can be claimed.

Question 5

What happens if the exclusion is reasonable? (3)

Answer 5

The exclusion / limitation clause will be valid, so the liability of the seller will be restricted in line with that clause and the remedies available to the buyer for breach of contract will be reduced accordingly.

Question 6

What happens if the exclusion is unreasonable? (3)

Answer 6

The exclusion / limitation clause will not be valid, so the liability of the seller will not be restricted by that clause and the remedies available to the buyer for a breach of contract of the sale will not be reduced accordingly.