Exclusion/ limitation clauses (OLA 1957)

Question 1

Can an occupier modify his duty?

Answer 1

Yes can extend, restrict, modify or exclude his duty (s2(1)).

Question 2

What are the 4 restrictions on the occupier’s freedom to use an exclusion clause to exclude or lessen their liability?

Answer 2

(1) Section 3 OLA 1957
(2) Unfair Contract Terms Act 1977 (‘UCTA 1977’);
(3) Consumer Rights Act 2015 (‘CRA 2015’)
(4) Common law.

Question 3

What does section 3 OLA 1957 state about excluding liability?

Answer 3

• Section 3 states that the occupier cannot, by contract, exclude or restrict the common duty of care which he owes to a third party.
• s.3(1) states that where an occupier is bound by a contract to allow people who are strangers to enter or use the premises, the duty of care that the occupier owes those strangers cannot be restricted or excluded by the contract.
• The purpose of s.3(1) OLA 1957 is to protect employees of a person with whom the occupier has contracted. Therefore, if the occupier has contracted with X for X’s employees to do work on the occupier’s premises, the occupier may not restrict or exclude any liability to them under the OLA 1957.

Question 4

What does UCTA 1977 state about excluding liability?

Answer 4

• This statute restricts the use of exclusion clauses/notices to exclude or limit liability for negligence.
• UCTA 1977 applies to ‘business to business’ liability,
• Section 2(1) UCTA 1977 states that a person cannot exclude or restrict his liability for death or personal injury resulting from negligence.
• Section 2(2) UCTA 1977 states that in relation to loss other than death or personal injury​, a person cannot exclude or restrict his liability for negligence except in so far as the term or notice satisfies the requirement of reasonableness​. See s.11 and schedule 2.
• Section 2(3) UCTA 1977 states that the fact that a person is aware of an exclusion clause/notice does not in itself mean that they have consented to the risk.

Question 5

What does CRA 2015 state about excluding liability?

Answer 5

• This statute restricts the use of exclusion clauses/notices to exclude or limit liability for negligence.
• The CRA 2015 applies where the contract/notice is between a consumer and a trader.
• Section 65(1) CRA 2015 states that a trader cannot exclude or restrict liability for death or personal injury resulting from negligence.
• In respect of damage other than death or personal injury, anunfairterm or notice is not binding on the consumer (s.62(1) and s.62(2) CRA 2015 respectively).
• A term is unfair “if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer” (s.62(4) CRA 2015). A similar clause exists in relation to notices, see sections 62(6) and (7) CRA 2015.
• Sections 62(5) and Part 1 Schedule 2 of the CRA 2015 provide further guidance in determining whether a term is unfair.
• Section 65(2) CRA 2015 states that where a term of a consumer contract/notice purports to exclude or restrict a trader’s liability for negligence, a person is not to be taken to have voluntarily accepted any risk merely because they agreed to or knew about the term/notice.

Question 6

What does the common law state about excluding liability?

Answer 6

principle of ‘common humanity’ (British Railway Board v Herrington.)
This represents the minimum legal standard of care which can never be excluded by agreement or notice.
- OLA 1957 & OLA 1984