Specified date
Specified date: 1 February 1978: see s 31(1).
Extent
This section does not extend to Scotland:
see s 32(2).
3 Liability arising in contract
| (1) This section applies as between contracting
parties where one of them deals as consumer or on the other’s written
standard terms of business. |
| |
|
|
| (2) As against that party, the other
cannot by reference to any contract term—
|
| |
|
|
| |
(a)� |
when himself in breach of contract, exclude
or restrict any liability of his in respect of the breach; or |
| |
|
|
| |
(b)� |
claim to be entitled— |
| |
|
|
| |
|
(i) to render a contractual performance
substantially different from that which was reasonably expected of
him, or |
| |
|
|
| |
|
(ii) in respect of the whole or any part
of his contractual obligation, to render no performance at all, |
except in so far as (in any of the cases mentioned above in
this subsection) the contract term satisfies the requirement of reasonableness.
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Extent
This section does not extend to Scotland: see s 32(2).
4 Unreasonable indemnity clauses
(1) A person dealing as consumer cannot
by reference to any contract term be made to indemnify another person (whether
a party to the contract or not) in respect of liability that may be incurred
by the other for negligence or breach of contract, except in so far as
the contract term satisfies the requirement of reasonableness.
(2) This section applies whether the
liability in question—
| |
(a) |
is directly that of the person to be
indemnified or is incurred by him vicariously; |
| |
|
|
| |
(b)�� |
is to the person dealing as consumer or to someone else. |
�
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Extent
This section does not extend to Scotland:
see s 32(2).
Liability arising from sale or supply of goods
5 "Guarantee" of consumer goods
(1) In the case of goods of a type ordinarily supplied
for private use or consumption, where loss or damage—
| |
(a) |
arises from the goods proving defective
while in consumer use; and |
| |
|
|
| |
(b)�� |
results from the negligence of a person
concerned in the manufacture or distribution of the goods, |
�������
�����
liability for the loss or damage cannot be excluded or restricted
by reference to any contract term or notice contained in or operating by
reference to a guarantee of the goods.
(2) For these purposes—
| |
(a) |
goods are to be regarded as
“in consumer use” when a person is using them, or has them in his possession
for use, otherwise than exclusively for the purposes of a business; and |
| |
|
|
| |
(b)�� |
anything
in writing is a guarantee if it contains or purports to contain some
promise or assurance (however
worded or presented) that defects will be made good by complete or partial
replacement, or by repair, monetary compensation or otherwise. |
(3) This section does not apply as between
the parties to a contract under or in pursuance of which possession or
ownership of the goods passed.
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Extent
This section does not extend to Scotland: see s 32(2).
6 Sale and hire-purchase
(1) Liability for breach of the
obligations arising from—
| |
(a)� |
[section 12 of the Sale of Goods Act
1979] (seller’s implied undertakings as to title, etc); |
| |
|
|
| |
(b) |
section 8 of the Supply of Goods (Implied
Terms) Act 1973 (the corresponding thing in relation to hire-purchase), |
cannot be excluded or restricted by reference to any contract
term.
(2) As against a person dealing as consumer, liability
for breach of the obligations arising from—
| |
(a)� |
[section 13, 14 or 15 of the 1979 Act]
(seller’s implied undertakings as to conformity of goods with description
or sample, or as to their quality or fitness for a particular purpose); |
| |
|
|
| |
(b) |
section 9, 10 or 11 of the 1973 Act (the
corresponding things in relation to hire�purchase), |
cannot be excluded or restricted by reference to any contract
term.
(3) As against a person dealing otherwise
than as consumer, the liability specified in subsection (2) above can be
excluded or restricted by reference to a contract term, but only in so
far as the term satisfies the requirement of reasonableness.
(4) The liabilities referred to in this
section are not only the business liabilities defined by section 1(3),
but include those arising under any contract of sale of goods or hire-purchase
agreement.
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Extent
This section does not extend to Scotland:
see s 32(2).
Amendment
Sub-ss (1), (2): words in square brackets substituted
by the Sale of Goods Act 1979, s 63, Sch 2, para 19.
7 Miscellaneous contracts under which goods pass
(1) Where the possession or ownership
of goods passes under or in pursuance of a contract not governed by the
law of sale of goods or hire-purchase, subsections (2) to (4) below apply
as regards the effect (if any) to be given to contract terms excluding
or restricting liability for breach of obligation arising by implication
of law from the nature of the contract.
(2) As against a person dealing as consumer,
liability in respect of the goods’
correspondence with description or sample, or their
quality or fitness for any particular purpose, cannot be excluded or restricted
by reference to any such term.
(3) As against a person dealing otherwise
than as consumer, that liability can be excluded or restricted by reference
to such a term, but only in so far as the term satisfies the requirement
of reasonableness.
[(3A) Liability for breach of the obligations
arising under section 2 of the Supply of Goods and Services Act 1982 (implied
terms about title etc in certain contracts for the transfer of the property
in goods) cannot be excluded or restricted by references to any such term.]
(4) Liability in respect of—
| |
(a)� |
the right to transfer ownership of the
goods, or give possession; or |
| |
|
|
| |
(b) |
the assurance of quiet possession to
a person taking goods in pursuance of the contract, |
cannot [(in a case to which subsection (3A) above does not
apply)] be excluded or restricted by reference to any such term except
in so far as the term satisfies the requirement of reasonableness.
(5) This section does not apply in the case of goods passing on a redemption
of trading stamps within the Trading Stamps Act 1964 or the Trading Stamps
Act (Northern Ireland) 1965.
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Amendment
| |
Sub-s (3A): inserted by the Supply of Goods and Services Act 1982, s 17(2),
(3). |
| |
Sub-s (4): words in square brackets inserted by the Supply of Goods and Services
Act 1982, s 17(2), (3). |
| |
|
Extent
This section
does not extend to Scotland:
see s 32(2).
...
8 Misrepresentation
. . .
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Amendment
This
section substitutes the Misrepresentation Act 1967, s 3 and the Misrepresentation
Act (Northern Ireland) 1967, s
3.
Extent
This section does not extend to Scotland: see s 32(2).
9 Effect of breach
(1) Where for reliance upon it a contract
term has to satisfy the requirement of reasonableness, it may be found
to do so and be given effect accordingly notwithstanding that the contract
has been terminated either by breach or by a party electing to treat it
as repudiated.
(2) Where on a breach the contract is
nevertheless affirmed by a party entitled to treat it as repudiated, this
does not of itself exclude the requirement of reasonableness in relation
to any contract term.
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Extent
This section does not extend to Scotland:
see s 32(2).
10 Evasion by means of secondary contract
A person is not bound by any contract term prejudicing
or taking away rights of his which arise under, or in connection with the
performance of, another contract, so far as those rights extend to the
enforcement of another’s liability which this Part of this Act prevents
that other from excluding or restricting.
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Extent
This section does not extend to Scotland:
see s 32(2).
Explanatory provisions
11 The "reasonableness" test
(1) In relation to a contract term, the
requirement of reasonableness for the purposes of this Part of this Act,
section 3 of the Misrepresentation Act 1967 and section 3 of the Misrepresentation
Act (Northern Ireland) 1967 is that the term shall have been a fair and
reasonable one to be included having regard to the circumstances which
were, or ought reasonably to have been, known to or in the contemplation
of the parties when the contract was made.
(2) In determining for the purposes of
section 6 or 7 above whether a contract term satisfies the requirement
of reasonableness, regard shall be had in particular to the matters specified
in Schedule 2 to this Act; but this subsection does not prevent the court
or arbitrator from holding, in accordance with any rule of law, that a
term which purports to exclude or restrict any relevant liability is not
a term of the contract.
(3) In relation to a notice (not being
a notice having contractual effect), the requirement of reasonableness
under this Act is that it should be fair and reasonable to allow reliance
on it, having regard to all the circumstances obtaining when the liability
arose or (but for the notice)
would have arisen.
(4) Where by reference to a contract
term or notice a person seeks to restrict liability to a specified sum
of money, and the question arises (under this or any other Act) whether
the term or notice satisfies the requirement of reasonableness, regard
shall be had in particular (but without prejudice to subsection (2) above
in the case of contract terms) to—
| |
(a)� |
the resources which he could expect to
be available to him for the purpose of meeting the liability should
it arise; and |
| |
|
|
| |
(b) |
how far it was open to him to cover himself by insurance. |
(5) It is for those claiming that a contract
term or notice satisfies the requirement of reasonableness to show that
it does.
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Extent
This section does not extend to Scotland:
see s 32(2).
12 "Dealing as consumer"
(1) A party to a contract “deals as consumer” in relation to another party
if—
| |
(a)� |
he neither makes the contract in the
course of a business nor holds himself out as doing so; and |
| |
|
|
| |
(b) |
the other party does make the contract
in the course of a business; and |
| |
|
|
| |
(c) |
in the case of a contract governed by the law of sale of goods
or hire-purchase, or by section 7 of this Act, the goods passing under
or in pursuance of the contract are of a type ordinarily supplied for
private use or consumption. |
[(1A) But if the first party mentioned in subsection
(1) is an individual paragraph (c) of that subsection must be ignored.]
[(2) But the buyer is not in any circumstances to be regarded as dealing as
consumer—
| |
(a)� |
if he is an individual and the goods
are second hand goods sold at public auction at which individuals have
the opportunity of attending the sale in person; |
| |
|
|
| |
(b) |
if he is not an individual and the goods are sold by auction
or by competitive tender.] |
(3) Subject to this, it is for those claiming that a party does not deal as
consumer to show that he does not.
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Extent
This section does not extend to Scotland:
see s 32(2).
Amendment
Sub-s (1A): inserted by SI 2002/3045, reg 14(1), (2).
Date
in force: 31 March 2003: see SI 2002/3045, reg 1(1).
Sub-s (2): substituted by SI 2002/3045, reg 14(1), (3).
Date in force: 31 March 2003: see SI 2002/3045, reg 1(1).
13 Varieties of exemption clause
(1) To the extent that this Part of this Act prevents
the exclusion or restriction of any liability it also prevents—
|
(a)
|
|
making the liability or
its enforcement subject to restrictive or onerous conditions;
|
|
(b)
|
|
excluding or restricting
any right or remedy in respect of the liability, or subjecting a
|
| |
|
person to any prejudice
in consequence of his pursuing any such right or remedy;
|
|
(c)
|
|
excluding or restricting
rules of evidence or procedure;
|
and (to that extent) sections 2 and
5 to 7 also prevent excluding or restricting liability by reference to terms
and notices which exclude or restrict the relevant obligation or duty.
(2) But an agreement in writing to submit present or future differences
to arbitration is not to be treated under this Part of this Act as excluding
or restricting any liability.
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Extent
This section does not extend to Scotland:
see s 32(2).
14 Interpretation of Part I
In this Part of this Act—
| |
"business" includes a profession and the activities of
any government department or local or public authority; |
| |
|
| |
"goods" has the same meaning as in [the Sale of Goods
Act 1979]: |
| |
|
| |
"hire-purchase agreement" has the same meaning as in
the Consumer Credit Act 1974; |
| |
|
| |
"negligence" has the meaning given by section 1(1); |
| |
|
| |
"notice" includes an announcement, whether or not in
writing, and any other communication or pretended communication; and |
| |
|
| |
"personal injury" includes any disease and any impairment
of physical or mental condition. |
| |
|
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Amendment
Words in square
brackets in definition “goods” substituted by the Sale of Goods Act 1979, s 63,
Sch 2, para 20.
Extent
This section does not extend to Scotland: see s 32(2).
Part II Amendment of Law for Scotland
15 Scope of Part II
(1) This Part of this Act . . ., is subject to Part III of this Act and does not affect
the validity of any discharge or indemnity given by a person in consideration
of the receipt by him of compensation in settlement of any claim which
he has.
(2) Subject to subsection (3) below,
sections 16 to 18 of this Act apply to any contract only to the extent
that the contract—
| |
(a) |
relates to the transfer of
the ownership or possession of goods from one person to another (with
or without work having been done on them); |
| |
|
|
| |
(b) |
constitutes a contract of service or apprenticeship; |
| |
|
|
| |
(c) |
relates to services of whatever kind,
including (without prejudice to the foregoing generality) carriage,
deposit and pledge, care and custody, mandate, agency, loan and services
relating to the use of land; |
| |
|
|
| |
(d) |
relates to the liability of an occupier
of land to persons entering upon or using that land; |
| |
|
|
| |
(e) |
relates to a grant of any right or permission
to enter upon or use land not amounting to an estate or interest in the land. |
(3) Notwithstanding anything in subsection
(2) above, section 16 to 18—
| |
(a)� |
do not apply to any contract to the extent
that the contract— |
| |
|
|
| |
|
(i) is a contract of insurance (including
a contract to pay an annuity on human life); |
| |
|
|
| |
|
(ii) relates to the formation, constitution
or dissolution of any body corporate or unincorporated association
or partnership; |
| |
|
|
| |
(b)� |
apply to— |
| |
|
|
| |
|
a contract of marine salvage or towage; |
| |
|
|
| |
|
a charter party of a ship or hovercraft; |
| |
|
|
| |
|
a contract for the carriage of goods
by ship or hovercraft; or, |
| |
|
|
| |
|
a contract to which subsection (4) below
relates, |
| |
|
|
| |
only to the extent that— |
| |
|
|
| |
|
(i) both parties deal or hold themselves out as dealing
in the course of a business (and then only in so far as the contract
purports to exclude or restrict liability for breach of duty in respect
of death or personal injury); or |
| |
|
|
| |
|
(ii) the contract is a consumer contract (and then only in favour
of the consumer). |
| |
|
|
(4) This subsection relates to a contract in pursuance of which
goods are carried by ship or hovercraft and which either—
| |
(a)� |
specifies ship or hovercraft as the means of carriage
over part of the journey to be covered; or |
| |
|
|
| |
(b) |
makes no provision as to the means of carriage and does
not exclude ship or hovercraft as that means,
|
in so far as the contract operates
for and in relation to the carriage of the goods by that means.
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Extent
This section applies to Scotland only: see s 32(3).
Amendment
Words omitted repealed by the Law Reform (Miscellaneous Provisions) (Scotland)
Act 1990, ss 68(2), (6), 74(2), Sch 9.
16 Liability for breach of duty
(1) [Subject to subsection (1A) below,] where a term of a contract [, or a
provision of a notice given to persons generally or to particular persons,]
purports to exclude or restrict liability for breach of duty arising in
the course of any business or from the occupation of any premises used
for business purposes of the occupier, that term [or provision]—
| |
(a)� |
shall be void in any case where such
exclusion or restriction is in respect of death or personal injury; |
| |
|
|
| |
(b) |
shall, in any other case, have no effect
if it was not fair and reasonable to incorporate the term in the contract
[or, as the case may be, if it is not fair and reasonable to allow
reliance on the provision]. |
[(1A) Nothing in paragraph (b)
of subsection (1) above shall be taken as implying that a provision of
a notice has effect in circumstances where, apart from that paragraph,
it would not have effect.]
(2) Subsection (1)(a) above does not
affect the validity of any discharge and indemnity given by a person, on
or in connection with an award to him of compensation for pneumoconiosis
attributable to employment in the coal industry, in respect of any further
claim arising from his contracting that disease.
(3) Where under subsection (1) above
a term of a contract [or a provision of a notice] is void or has no effect,
the fact that a person agreed to, or was aware of, the term [or provision]
shall not of itself be sufficient evidence that he knowingly and voluntarily
assumed any risk.
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Extent
This section applies to Scotland only: see s 32(3).
Amendment
| |
Sub-s (1): words in square brackets inserted by the Law
Reform (Miscellaneous Provisions) (Scotland) Act 1990, s 68
(3)(a), (6) |
| |
Sub-s (1A): inserted by the Law Reform (Miscellaneous
Provisions) (Scotland) Act 1990, s 68(3)(b), (6). |
| |
Sub-s (3): words in square brackets inserted by the Law
Reform (Miscellaneous Provisions) (Scotland) Act 1990, s 68 (3)(c), (6). |
.
17 Control of unreasonable exemptions in consumer or standard form contracts
(1) Any term of a contract which is a consumer contract or a standard form
contract shall have no effect for the purpose of enabling a party to the
contract—
| |
(a)� |
who is in breach of a contractual obligation,
to exclude or restrict any liability of his to the consumer or customer
in respect of the breach; |
| |
|
|
| |
(b) |
in respect of a contractual obligation,
to render no performance, or to render a performance substantially
different from that which the consumer or customer reasonably expected
from the contract; |
if it was not fair and reasonable to incorporate the term
in the contract.
(2) In this section “customer” means a party to a standard form contract who
deals on the basis of written standard terms of business of the other party
to the contract who himself deals in the course of a business.
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Extent
This section applies to Scotland only: see s 32(3).
18 Unreasonable indemnity clauses in consumer contracts
(1) Any term of a contract which is a
consumer contract shall have no effect for the purpose of making the consumer
indemnify another person (whether a party to the contract or not) in respect
of liability which that other person may incur as a result of breach of
duty or breach of contract, if it was not fair and reasonable to incorporate
the term in the contract.
(2) In this section “liability” means
liability arising in the course of any business or from the occupation
of any premises used for business purposes of the occupier.
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Extent
This section applies to Scotland only: see s 32(3).
19 “Guarantee of consumer goods”
(1) This section applies to a guarantee—
| |
(a)� |
in relation to goods which are of a type
ordinarily supplied for private use or consumption; and |
| |
|
|
| |
(b) |
which is not a guarantee given by one party to the other party
to a contract under or in pursuance of which the ownership or possession
of the goods to which the guarantee relates is transferred. |
(2) A term of a guarantee to which this
section applies shall be void in so far as it purports to exclude or restrict
liability for loss or damage (including death or personal injury)—
| |
(a)� |
arising from the goods proving defective
while— |
| |
|
|
| |
|
(i) in use otherwise than exclusively
for the purposes of a business; or |
| |
|
|
| |
|
(ii) in the possession of a person for
such use; and |
| |
|
|
| |
(b) |
resulting from the breach of duty of a person concerned in
the manufacture or distribution of the goods. |
(3) For the purposes of this section,
any document is a guarantee if it contains or purports to contain some
promise or assurance (however worded or presented) that defects will be
made good by complete or partial replacement, or by repair, monetary compensation
otherwise.
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Extent
This section applies to Scotland only: see s 32(3).
20 Obligations implied by law in sale and hire-purchase contracts
(1) Any term of a contract which purports to exclude
or restrict liability for breach of the obligations arising from—
| |
(a)� |
section 12 of the Sale of Goods Act [1979] (seller's implied
undertakings as to title etc.); |
| |
|
|
| |
(b) |
section 8 of the Supply of Goods (Implied
Terms) Act 1973 (implied terms as to title in hire-purchase agreements), |
shall be void.
(2) Any term of a contract which purports to exclude
or restrict liability for breach of the obligations arising from—
| |
(a)� |
section 13, 14 or 15 of the said Act
of [1979] (seller's implied undertakings as to conformity of goods
with description or sample, or as to their quality or fitness for a
particular purpose); |
| |
|
|
| |
(b) |
section 9, 10 or 11 of the said Act of
1973 (the corresponding provisions in relation to hire-purchase), |
shall—
| |
|
(i) in the case of a consumer contract,
be void against the consumer; |
| |
|
|
| |
|
(ii) in any
other case, have no effect if it was not fair and reasonable to incorporate
the term in the contract. |
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Extent
This section applies to Scotland only: see s 32(3).
Amendment
Sub-ss (1), (2): words in square brackets substituted
by the Sale of Goods Act 1979, ss 62, 63, Sch 2, para 21.
21 Obligations implied by law in other contracts for
the supply of goods
(1) Any term of a contract to which this
section applies purporting to exclude or restrict liability for breach
of an obligation—
| |
(a)� |
such as is referred to in subsection
(3)(a) below— |
| |
|
|
| |
|
(i) in the case of a consumer contract,
shall be void against the consumer, and |
| |
|
|
| |
|
(ii) in any other case, shall have no
effect if it was not fair and reasonable to incorporate the term in
the contract; |
| |
|
|
| |
(b) |
such as is referred to in subsection (3)(b) below, shall have
no effect if it was not fair and reasonable to incorporate the term
in the contract. |
(2) This section applies to any contract
to the extent that it relates to any such matter as is referred to in section
15(2)(a) of this Act, but does not apply to—
| |
(a)� |
a contract of sale of goods or a hire-purchase
agreement; or |
| |
|
|
| |
(b) |
a charter party of a ship or hovercraft unless it is a consumer
contract (and then only in favour of the consumer). |
(3) An obligation referred to in this
subsection is an obligation incurred under a contract in the course of
a business and arising by implication of law from the nature of the contract
which relates—
| |
(a)� |
to the correspondence of goods with description
or sample, or to the quality or fitness of goods for any particular
purpose; or |
| |
|
|
| |
(b) |
to any right to transfer ownership or possession of goods,
or to the enjoyment of quiet possession of goods. |
(4) Nothing in this section applies to
the supply of goods on a redemption of trading stamps within the Trading
Stamps Act 1964.
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Extent
This section applies to Scotland only: see s 32(3).
Amendment
Sub-s (4): repealed by SI 2005/871, art 6, Schedule.
Date in force: 6 April 2005: see SI 2005/871, art 1.
22 Consequence of breach
For the avoidance of doubt, where any provision of this Part of this Act requires
that the incorporation of a term in a contract must be fair and reasonable
for that term to have effect—
|
(a)
|
|
if that requirement is
satisfied, the term may be given effect to notwithstanding that the
contract has been terminated in consequence of breach of that contract;
|
| |
|
|
|
(b)
|
|
for the term to be given
effect to, that requirement must be satisfied even where a party who is entitled to rescind the contract elects not
to rescind it.
|
| |
|
|
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Extent
This section applies to Scotland only: see s 32(3).
23 Evasion by means of secondary
contract
Any term of any contract shall be void which purports
to exclude or restrict, or has the effect of excluding or restricting—
| |
(a)� |
the exercise, by a party to any other
contract, of any right or remedy which arises in respect of that other
contract in consequence of breach of duty, or of obligation, liability
for which could not by virtue of the provisions of this Part of this
Act be excluded or restricted by a term of that other contract; |
| |
|
|
| |
(b) |
the application of the provisions of this Part of this Act
in respect of that or any other contract. |
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Extent
This section applies to Scotland only: see s 32(3).
24 The “reasonableness” test
(1) In determining for the purposes of
this Part of this Act whether it was fair and reasonable to incorporate
a term in a contract, regard shall be had only to the circumstances which
were, or ought reasonably to have been, known to or in the contemplation
of the parties to the contract at the time the contract was made.
(2) In determining for the purposes of
section 20 or 21 of this Act whether it was fair and reasonable to incorporate
a term in a contract, regard shall be had in particular to the matters
specified in Schedule 2 to this Act; but this subsection shall not prevent
a court or arbiter from holding, in accordance with any rule of law, that
a term which purports to exclude or restrict any relevant liability is
not a term of the contract.
[(2A) In determining for the purposes
of this Part of this Act whether it is fair and reasonable to allow reliance
on a provision of a notice (not being a notice having contractual effect),
regard shall be had to all the circumstances obtaining when the liability
arose of (but for the provision) would have arisen.]
(3) Where a term in a contract [or a
provision of a notice] purports to restrict liability to a specified sum
of money, and the question arises for the purposes of this Part of this
Act whether it was fair and reasonable to incorporate the term in the contract
[or whether it is fair and reasonable to allow reliance on the provision],
then, without prejudice to subsection (2) above [in the case of a term
in a contract], regard shall be had in particular to—
| |
(a)� |
the resources which the party seeking
to rely on that term [or provision] could expect to be available to
him for the purpose of meeting the liability should it arise; |
| |
|
|
| |
(b) |
how far it was open to that party to cover himself by insurance. |
(4) The onus of proving that it was fair
and reasonable to incorporate a term in a contract [or that it is fair
and reasonable to allow reliance on a provision of a notice] shall lie
on the party so contending.
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Extent
This section applies to Scotland only: see s 32(3).
Amendment
| |
Sub-ss (3), (4): words in square brackets inserted by
the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990, s 68(4)(b),
(c), (6). |
| |
Sub-s (2A): inserted by the Law Reform (Miscellaneous
Provisions) (Scotland) Act 1990, s 68(4)(a), (6). |
| |
|
25 Interpretation of Part II
(1) In this Part of this Act—
| |
"breach of duty" means the breach- |
| |
|
|
| |
|
(a) of any obligation, arising from the
express or implied terms of a contract, to take reasonable care or
exercise reasonable skill in the performance of the contract; |
| |
|
|
| |
|
(b) of any common law duty to take reasonable
care or exercise reasonable skill; |
| |
|
|
| |
|
(c) of the duty of reasonable care imposed
by section 2(1) of the Occupiers’ Liability (Scotland) Act 1960; |
| |
|
|
| |
"business" includes a profession
and the activities of any government department or local or public
authority; |
| |
|
|
| |
"consumer" has the meaning assigned
to that expression in the definition in this section of "consumer contract"; |
| |
|
|
| |
"consumer contract" means [subject
to subsections (1A) and (1B) below] a contract . . . in which- |
| |
|
|
| |
|
(a) one party to the contract deals,
and the other party to the contract (“the consumer”) does not deal
or hold himself out as dealing, in the course of a business, and |
| |
|
|
| |
|
(b) in the case of a contract such as
is mentioned in section 15(2)(a) of this Act, the goods are of a type
ordinarily supplied for private use or consumption; |
| |
|
|
| |
and for the purposes of this
Part of this Act the onus of proving that a contract is not to be regarded
as a consumer contract shall lie on the party so contending; |
| |
|
|
| |
"goods" has the same meaning
as in [the Sale of Goods Act 1979]; |
| |
|
|
| |
"hire-purchase agreement" has the same meaning as in
section 189(1) of the Consumer Credit Act 1974; |
| |
|
|
| |
[“notice” includes an announcement,
whether or not in writing, and any other
communication or pretended communication;] |
| |
|
|
| |
"personal injury" includes any
disease and any impairment of physical or mental condition. |
[(1A) Where the consumer is
an individual, paragraph (b) in the definition of “consumer contract” in
subsection (1) must be disregarded.
(1B) The expression of “consumer contract” does not
include a contract in which—
| |
(a)� |
the buyer is an individual and the goods
are second hand goods sold by public auction at which individuals have
the opportunity of attending in person; or |
| |
|
|
| |
(b) |
the buyer is not an individual and the goods are sold by auction
or competitive tender.] |
(2) In relation to any breach of duty
or obligation, it is immaterial for any purpose of this Part of this Act
whether the act or omission giving rise to that breach was inadvertent
or intentional, or whether liability for it arises directly or vicariously.
(3) In this Part of this Act, any reference
to excluding or restricting any liability includes--
| |
(a)� |
making the liability or its enforcement
subject to any restrictive or onerous conditions; |
| |
|
|
| |
(b) |
excluding or restricting any right or
remedy in respect of the liability, or subjecting a person to any prejudice
in consequence of his pursuing any such right or remedy; |
| |
|
|
| |
(c) |
excluding or restricting any rule of
evidence or procedure; |
| |
|
|
| |
(d)� |
. . . |
but does not include an agreement to submit any question
to arbitration.
(4) . . .
(5) In sections 15 and 16 and 19 to 21
of this Act, any reference to excluding or restricting liability for breach
of an obligation or duty shall include a reference to excluding or restricting
the obligation or duty itself.
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Extent
This section applies to Scotland only: see s 32(3).
Amendment
| |
Sub-s (1): in definition “consumer contract”
words “subject to subsections (1A) and (1B) below” in square brackets
inserted by SI 2002/3045, reg 14(1), (4)(a)(i). |
| |
|
Date in force: 31 March 2003: see SI 2002/3045, reg 1(1). |
| |
Sub-s (1): in definition “consumer contract” words omitted
repealed by SI 2002/3045, reg 14(1), (4)(a)(ii). |
| |
|
Date in force: 31 March 2003: see SI 2002/3045, reg 1(1). |
| |
Sub-s (1): in definition “goods” words in square brackets
substituted by the Sale of Goods Act 1979, ss 62, 63, Sch 2, para 22. |
| |
Sub-s (1): definition “notice” inserted by the Law Reform
(Miscellaneous Provisions) (Scotland)
Act 1990, s 68(5)(a), (6). |
| |
Sub-ss (1A), (1B): inserted by SI 2002/3045, reg 14(1),
(4)(b). |
| |
|
Date in force: 31 March 2003: see SI 2002/3045, reg 1(1). |
| |
Sub-s (3): para (d) repealed by the Law Reform (Miscellaneous
Provisions) (Scotland) Act 1990, ss 68(5)(b), (6), 74(2), Sch 9. |
| |
Sub-s (4): repealed by the Law Reform (Miscellaneous
Provisions) (Scotland) Act 1990, ss 68(5)(b), (6), 74(2), Sch 9. |
Part III Provisions applying to whole of United
Kingdom
Miscellaneous
26 International supply contracts
(1) The limits imposed by this Act on
the extent to which a person may exclude or restrict liability by reference
to a contract term do not apply to liability arising under such a contract
as is described in subsection (3) below.
(2) The terms of such a contract are
not subject to any requirement of reasonableness under section 3 or 4:
and nothing in Part II of this Act shall require the incorporation of the
terms of such a contract to be fair and reasonable for them to have effect.
(3) Subject to subsection (4), that description
of contract is one whose characteristics are the following—
| |
(a)� |
either it is a contract of sale of goods
or it is one under or in pursuance of which the possession or ownership
of goods passes; and |
| |
|
|
| |
(b) |
it is made by parties whose places of business (or, if they
have none, habitual residences) are in the territories of different
States (the Channel Islands and the Isle of Man being treated for this
purpose as different States from the United
Kingdom). |
(4) A contract falls within subsection
(3) above only if either—
| |
(a)� |
the goods in question are, at the time
of the conclusion of the contract, in the course of carriage, or will
be carried, from the territory of one State to the territory of another;
or |
| |
|
|
| |
(b) |
the acts constituting the offer and acceptance
have been done in the territories of different States; or |
| |
|
|
| |
(c) |
the contract provides for the goods
to be delivered to the territory of a State other than that within whose territory those acts were done. |
NOTES�����
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
27 Choice of law clauses
(1) Where the [law applicable to] a contract
is the law of any part of the United Kingdom only by choice of the parties
(and apart from that choice would be the law of some country outside the
United Kingdom) sections 2 to 7 and 16 to 21 of this Act do not operate
as part [of the law applicable to the contract].
(2) This Act has effect notwithstanding
any contract term which applies or purports to apply the law of some country
outside the United Kingdom,
where (either or both)—
| |
(a)� |
the term appears to the court, or arbitrator
or arbiter to have been imposed wholly or mainly for the purpose of
enabling the party imposing it to evade the operation of this Act;
or |
| |
|
|
| |
(b) |
in the making of the contract one of
the parties dealt as consumer, and he was then habitually resident
in the United Kingdom, and the essential steps necessary for the making
of the contract were taken there, whether by him or by others on his
behalf. |
(3) In the application of subsection
(2) above to Scotland,
for paragraph (b) there shall be substituted—
| |
"(b) |
the contract is a consumer contract as defined in Part
II of this Act, and the consumer at the date when the contract was
made was habitually resident in the United Kingdom, and the essential
steps necessary for the making of the contract were taken there, whether
by him or by others on his behalf.”. |
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Amendment
Sub-s (1): words in square brackets substituted by the Contracts (Applicable
Law) Act 1990, s 5, Sch 4, para 4.
28 Temporary provision for sea carriage of passengers
(1) This section applies to a contract
for carriage by sea of a passenger or of a passenger and his luggage where
the provisions of the Athens Convention (with or without modification)
do not have, in relation to the contract, the force of law in the United Kingdom.
(2) In a case where—
| |
(a)� |
the contract is not made in the United
Kingdom, and |
| |
|
|
| |
(b) |
neither the place of departure nor the
place of destination under it is in the United Kingdom, |
a person is not precluded by this Act from excluding or restricting liability
for loss or damage, being loss or damage for which the provisions of the
Convention would, if they had the force of law in relation to the contract,
impose liability on him.
(3) In any other case, a person is not
precluded by this Act from excluding or restricting liability for that
loss or damage—
| |
(a)� |
in so far as the exclusion or restriction
would have been effective in that case had the provisions of the Convention
had the force of law in relation to the contract; or |
| |
|
|
| |
(b) |
in such circumstances and to such extent as may be prescribed,
by reference to a prescribed term of the contract. |
(4)
For the purposes of subsection (3)
(a), the values which shall be taken to be the official values in
the United Kingdom of the amounts (expressed in gold francs) by reference
to which liability under the provisions of the Convention is limited shall
be such amounts in sterling as the Secretary of State may from time to
time by order made by statutory instrument specify.
(5) In this section,—
| |
(a)� |
the references to excluding or restricting
liability include doing any of those things in relation to the liability
which are mentioned in section 13 or section 25 (3) and (5); and |
| |
|
|
| |
(b) |
"the Athens Convention" means the Athens
Convention relating to the Carriage of Passengers and their Luggage
by Sea, 1974; and |
| |
|
|
| |
(c) |
"prescribed" means prescribed by the
Secretary of State by regulations made by statutory instrument; |
and a statutory instrument containing the regulations shall
be subject to annulment in pursuance of a resolution of either House of
Parliament.
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
29 Saving for other relevant legislation
| (1) Nothing in this Act removes or restricts
the effect of, or prevents reliance upon, any contractual provision
which— |
| |
|
| |
| (a) |
is authorised or required by the express
terms or necessary implication of an enactment; or |
|
| |
|
| |
| (b)��� |
being made with a view to compliance with an international
agreement to which the United
Kingdom is a party, does not operate more
restrictively than is contemplated by the agreement. |
|
| |
| (2) A contract term is to be taken— |
| |
|
| |
| (a) |
for the purposes of Part I of this Act,
as satisfying the requirement of reasonableness; and |
|
| |
������� |
| |
| (b)� |
for those of Part II, to have been fair
and reasonable to incorporate, |
|
| |
������ |
if it is incorporated or approved by, or incorporated pursuant to a decision
or ruling of, a competent authority acting in the exercise of any statutory
jurisdiction or function and is not a term in a contract to which the competent
authority is itself a party.
| (3) In this section— |
| |
|
| |
"competent authority" means
any court, arbitrator or arbiter, government department or public authority; |
| |
|
| |
"enactment" means any legislation
(including subordinate legislation) of the >United Kingdom or Northern Ireland and any instrument having effect
by virtue of such legislation; and |
| |
|
| |
"statutory" means conferred
by an enactment. |
| |
|
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
30 . . .
. . .
NOTES
Amendment
Repealed by the Consumer Safety Act 1978, s 10(1), Sch
3.
General
31 Commencement; amendments; repeals
(1) This Act comes into force on 1st
February 1978.
(2) Nothing in this Act applies to contracts
made before the date on which it comes into force; but subject to this,
it applies to liability for any loss or damage which is suffered on or
after that date.
(3) The enactments specified in Schedule
3 to this Act are amended as there shown.
(4) The enactments specified in Schedule
4 to this Act are repealed to the extent specified in column 3 of that
Schedule.
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see sub-s (1) above.
32 Citation and extent
(1) This Act may be cited as the Unfair
Contract Terms Act 1977.
(2) Part I of this Act extends to >England and Wales and
to Northern Ireland;
but it does not extend to Scotland.
(3) Part II of this Act extends to Scotland only.
(4) This Part of this Act extends to
the whole of the United
Kingdom.
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
SCHEDULE 1
SCOPE OF SECTIONS 2 TO 4 AND 7
Section 1(2)
1
Sections 2 to 4 of this Act do not extend to—
| |
(a)
|
|
any contract of insurance
(including a contract to pay an annuity on human life);
|
| |
|
|
|
| |
(b)
|
|
any contract so far as
it relates to the creation or transfer of an interest in land, or
to the termination of such
an interest, whether by extinction, merger, surrender, forfeiture
or otherwise;
|
| |
|
|
|
| |
(c)
|
|
any contract so far as
it relates to the creation or transfer of a right or interest in
any patent, trade mark, copyright
[or design right], registered design, technical or commercial information
or other intellectual property, or relates to the termination of
any such right or interest;
|
| |
|
|
|
| |
(d)
|
|
any contract so far as
it relates—
|
| |
|
|
to the formation or dissolution
of a company (which means any body corporate or unincorporated association and includes a partnership),
or
|
| |
|
|
(i)
to the formation or dissolution of a company (which means any body corporate
or unincorporated association and includes a partnership), or |
| |
|
|
|
| |
|
|
(ii) to its constitution or
the rights or obligations of its corporators or members;
|
| |
|
|
|
| |
(e)
|
|
any contract so far as
it relates to the creation or transfer of securities or of any right or interest in securities.
|
| |
|
|
|
|
|
|
|
2
Section 2(1) extends to—
(a) any contract of marine salvage or towage;
(b) any charterparty of a ship or hovercraft; and
(c) any contract for the carriage of goods by ship or
hovercraft;
but subject to this sections 2 to 4 and 7 do not extend to
any such contract except in favour of a person dealing as consumer.
3
Where goods are carried by ship or
hovercraft in pursuance of a contract which either—
| |
(a)� |
specifies that as the means of carriage over part of
the journey to be covered, or |
| |
|
|
| |
(b) |
makes no provision as to the means of carriage and does
not exclude that means, |
then sections 2(2), 3 and 4 do not, except in favour of a
person dealing as consumer, extend to the contract as it operates for and
in relation to the carriage of the goods by that means.
4
Section 2(1) and (2) do not extend to a contract of employment,
except in favour of the employee.
5
Section 2(1) does not affect the validity of any discharge and
indemnity given by a person, on or in connection with an award to him of
compensation for pneumoconiosis attributable to employment in the coal industry,
in respect of any further claim arising from his contracting that disease.
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Amendment
| |
Para 1: the reference to a trade mark in sub-para (c) includes a reference
to a service mark, by virtue of the Patents, Designs and Marks Act 1986,
s 2(3), Sch 2, Part I; words in square brackets inserted by the Copyright,
Designs and Patents Act 1988, s 303(1), Sch 7, para 24. |
Modification
| |
References to trade marks or registered trade marks within
the meaning of the Trade Marks Act 1938 shall, unless the context otherwise
requires, be construed as references to trade marks or registered trade
marks within the meaning of the Trade Marks Act 1994; see the Trade Marks
Act 1994, Sch 4, para 1. |
SCHEDULE 2
" GUIDELINES" FOR APPLICATION OF REASONABLENESS TEST
Sections 11(2), 24(2)
The matters to which regard is to be had in particular
for the purposes of sections 6(3), 7(3) and (4), 20 and 21 are any of the
following which appear to be relevant—
|
(a)
|
|
the strength of the bargaining
positions of the parties relative to each other, taking into account
(among other things) alternative means by which the customer’s requirements
could
have been met;
|
| |
|
|
|
(b)
|
|
whether the customer received
an inducement to agree to the term, or in accepting it had an opportunity
of entering into a similar contract with other persons, but without
having to
accept a similar term;
|
| |
|
|
|
(c)
|
|
whether the customer knew
or ought reasonably to have known of the existence and extent of
the term (having regard, among other things, to any custom of the
trade and any previous
course of dealing between the parties);
|
| |
|
|
| |
|
|
|
(d)
|
|
where the term excludes
or restricts any relevant liability if some condition is not complied
with, whether it was reasonable at the time of the contract to expect
that compliance
with that condition would be practicable;
|
| |
|
|
(e) |
|
whether the goods were
manufactured, processed or adapted to the special order of the customer.
|
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
SCHEDULE 3 AMENDMENT OF ENACTMENTS
Section 31(3)
. . .
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978: see s 31(1).
Amendment
| |
Repealed in part by the Sale of Goods Act 1979, s 63(2), Sch 3 and
the Statute Law (Repeals) Act 1981; remainder amends the Supply of Goods
(Implied Terms) Act 1973, ss 14, 15. |
SCHEDULE 4
REPEALS
Section 31(4).
|
Chapter
|
Short Title
|
Extent of Repeal
|
|
56 & 57 Vict c 71
|
Sale of Goods Act 1893
|
In section 55, subsections
(3)
to (11).
Section 55A.
|
| |
|
Section 61(6).
|
| |
|
In section 62(1) the definition
of “contract for the international sale of goods”.
|
|
1962 c 46
|
Transport Act 1962
|
Section 43(7).
|
|
1967 c 45
|
Uniform Laws on International Sales
Act 1967 |
In section 1(4), the words
“55 and 55A”
|
|
1972 c 33 |
Carriage by Railway Act 1972 |
In section 1(1), the words
from “and shall have” onwards. |
|
1973 c 13 |
Supply of Goods (Implied
Terms) Act 1973 |
Section 5(1).
|
| |
|
In section 7(1), the words from “contract for the international sale
of goods” onwards. |
| |
|
In section 12, subsections (2) to (9). |
| |
|
Section 13. |
| |
|
In section 15(1), the definition of “consumer
sale”. |
NOTES
Initial Commencement
Specified date
Specified date: 1 February 1978:
see s 31(1).