Reasonable Test - UCTA

Question 0

What are the key principles in the schedule 2 guidelines?

Answer 0

• relative strength of bargaining position
• did the customer receive an inducement?
• did the customer know about the clause, or ought to have known, considering trade customs/previous course of dealings.
• was compliance with the exemption clause reasonable at the time of the contract?
• whether the goods were manufactured, processed or adapted to the special order of the customer?

Question 1

What does section 11 say in UCTA?

Answer 1

The exemption clause must have been a fair and reasonable one to include having regard to the circumstances which were (or ought reasonably) to have been known or in the contemplation of the parties when contracting.

Question 2

Additional Guidelines for limitation clauses. What are they?

Answer 2

The resource which the defendant could expect to be available to him for the purpose of meeting the liability?

How far was it open for the defendant relying on the clause to be insured?

Question 3

Must the whole clause be reasonable?

Answer 3

Stewart Gill v Horatio - clauses must be considered as a whole. (‘The whole term and nothing but the term)

Watford Electronics v Sanderson - if terms have separate parts, must be considered separately. Prudent draftsman

Question 4

Smith v Eric Bush

What further guidance does it offer?

Answer 4

• were the parties of equal bargaining power?
• in the case of advice, would it have been reasonably practicable to obtain the advice from an alternative source taking into account considerations of coats and time?
• how difficult is the task? If really difficult, or dangerous, then this points to a higher chance of reasonably excluding liability
• what are the practical consequences? How easy would it be for the party relying on the clause to get insurance?

Question 5

Standard industry terms?

Answer 5

Seen as generally reasonable. Schenkers v Overland Shoes