The term must not come too late – Olley v Marlborough Court Hotel.
- It must be brought to the attention of the other party – Thornton v Shoe
Lane Parking. - Construction (interpretation) must cover the damage caused.
- The term must not offend the main purpose rule or the contra
proferentem rule.
Added to these requirements now are the two main provisions in the Unfair
Contract Terms Act 1977.
1 An attempt to exclude or restrict liability for death or personal injury
resulting from negligence is not allowed at all – section 2(1).
2 An attempt to exclude or restrict other liability caused by negligence will
only be allowed if reasonable – section 2(2).
Schedule 2 of the Unfair Contract Terms Act 1977 makes some suggestions
regarding reasonableness:
- the bargaining strength of the parties
- if any inducement was given to agree to the term
- if the customer knew of the term
- if the goods were specially manufactured.
For more detail see cases from Chapter 8 on reasonableness.
Other provisions in the Unfair Contract Terms Act 1977 which affect a
consumer are as follows:
- A party can only exclude liability for breach of contract, non-
performance or substantially different performance if this is reasonable- section 3(2). This applies when a person is dealing as a consumer and
also when dealing on written standard terms.
- section 3(2). This applies when a person is dealing as a consumer and
- A party can only exclude indemnity for negligence or breach of contract
where reasonable – section 4. - A party can only exclude a manufacturer’s guarantee where reasonable
- section 5. Here the party claiming must be a purchaser of goods
ordinarily supplied for private use or consumption. In a contract of sale
or hire-purchase, a party may not exclude an implied condition as to title
or description, and may only exclude liability regarding quality and
fitness for purpose if reasonable – section 6. The provision regarding
title applies to any contract, not just a consumer contract.
- section 5. Here the party claiming must be a purchaser of goods
246 Contract law
Can you find some examples of exemption clauses from real life? Try to
decide whether they are fair and if they would be valid, should they be relied
upon in court.