84 5: Content of contracts Part B The law of obligations
(c) Any clause that attempts to limit liability for breach of contract, where the contract is based on
standard terms or conditions, or where one of the parties is a consumer, is void unless it can be
shown to be reasonable.5.1 Clauses which are void
If an exclusion clause is made void by statute it is unnecessary to consider how other legal rules might
affect it. There is simply no need to assess whether it is reasonable.
A clause is void by statute in the following circumstances.
A clause which purports to exclude or limit liability for death or personal injury resulting from
negligence is void. This is the key circumstance to remember.
A guarantee clause which purports to exclude or limit liability for loss or damage caused by a
defect of the goods in consumer use is void.
In a contract for the sale or hire purchase of goods, a clause that purports to exclude the condition
that the seller has a right to sell the goods is void.
In a contract for the sale of goods, hire purchase, supply of work or materials or exchange with a
consumer, a clause that purports to exclude or limit liability for breach of the conditions relating to
description, quality, fitness and sample implied by the Sale of Goods Act 1979 is void.5.2 Clauses which are subject to a test of reasonableness
If a clause is not automatically void, it is subject to a test of reasonableness. The main provisions of the
Act that refer to this type of clause are set out below.5.3 Exclusion of liability for negligence
A person acting in the course of a business cannot, by reference to any contract term, restrict their liability
for death or personal injury resulting from negligence. The clause containing the term is simply void. In
the case of other loss or damage, a person cannot introduce a clause restricting their liability for
negligence unless the term is reasonable.5.4 Standard term contracts and consumer contracts
The person who uses a standard-term contract in dealing with a consumer cannot, unless the term is
reasonable, restrict liability for their own breach.5.4.1 Consumers
Where a business engages in an activity which is merely incidental to the business, the activity will not be
in the course of the business unless it is an integral part and carried on with a degree of regularity.R & B Customs Brokers Ltd v United Dominions Trust Ltd 1988
The facts: The claimants, a company owned by Mr and Mrs Bell and operating as a shipping broker,
bought a second-hand Colt Shogun. The car was to be used partly for business and partly for private use.
Decision: This was a consumer sale, since the company was not in the business of buying cars.5.5 Sale and supply of goods
Any contract (that is, consumer or non-consumer) for the sale or hire purchase of goods cannot exclude
the implied condition that the seller has a right to sell the goods.
As we saw earlier when looking at clauses that are automatically void, a consumer contract for the sale of
goods, hire purchase, supply of work or materials or exchange of goods cannot exclude or restrict liability
for breach of the conditions relating to description, quality, fitness and sample implied by the Sale of