Exclusion Clauses - Statute

Question 1

What are the 3 key questions to consider regarding exclusion clauses?

Answer 1

1. Is the clause incorporated into the contract?
2. Does the clause cover the breach or negligent act?
3. Is the clause regulated by legislation (UCTA or CRA)?

Question 2

What does the UCTA 1977 regulate?

Answer 2

UCTA applies to business-to-business contracts, controlling exemption clauses that exclude or restrict liability, especially for negligence and statutory implied terms

Question 3

What is the test for reasonableness under UCTA?

Answer 3

A clause must be fair and reasonable based on the circumstances at the time the contract was made, with the burden of proof on the party claiming reasonableness

Question 4

How does the CRA 2015 differ from UCTA?

Answer 4

CRA applies stricter controls in business-to-consumer contracts, particularly for exclusion clauses relating to death, personal injury, and statutory consumer rights

Question 5

How does UCTA regulate liability in non-consumer contracts?

Answer 5

UCTA limits the exclusion of liability for negligent personal injury or death (unexcludable) and regulates the reasonableness of clauses in standard form contracts, including those in sale of goods and supply of goods

Question 6

Which terms are automatically excluded under the CRA 2015?

Answer 6

Terms excluding liability for goods-related provisions (satisfactory quality, fitness for purpose) and negligence leading to death or personal injury are automatically unenforceable

Question 7

What is the test of unfairness under S62(4) of CRA?

Answer 7

A term is unfair if it violates good faith and causes a significant imbalance in parties’ rights, to the detriment of the consumer

Question 8

What does S64 of the CRA 2015 exclude from fairness assessment?

Answer 8

Terms related to the main subject matter or price appropriateness of a contract are excluded, provided they are transparent and prominent

Question 9

What does S68 of CRA require for transparency?

Answer 9

All terms must be clear, legible, and easily accessible, ensuring consumers are fully informed

Question 10

How does the law enforce fairness of contract terms?

Answer 10

Courts must assess fairness, and regulators like the CMA can take action against unfair terms, preventing their future use