Terms: Statutory Controls of Exclusion Clauses

Question 1

Warren v Trueprint Ltd.

Answer 1

• S11(5) of Unfair Contracts Terms Act 1977 requires the party who inserts the clause in the contract, and who seeks to rely on it, to show that is is reasonable in all the circumstances.

Question 2

Smith v Eric S. Bush

Answer 2

• The test is whether the insertion of the term in the contract is reasonable in the light of what was known to the parties at the time the contract was made. This is sometimes called the knowledge test.

Question 3

Watford Electronics Ltd v Sanderson CFL Ltd

Answer 3

• The exclusion clause was a reasonable term since the parties were of equal bargaining power and the limitation clause was subject to negotiation when the contract was made.

Question 4

George Mitchell Ltd v Finney Lock Seeds Ltd.

Answer 4

• S11(4) of Unfair Contracts Terms Act 1977 specifically relates to limitation clauses and not exclusion clauses as in this case.