statutory controls

• trader to trade contracts case

  Unfair Contract Terms Act 1977
• trader to consumer contracts case

  Consumer Rights Act 2015
• what does The Unfair Contract Terms Act 1977 provide

  the main protection against exclusion clauses in non-consumer contracts. it contains a test of reasonableness to be applies to exclusion clauses
• exclusion and limitation clauses not allowed by the act

  s.2(1) a person cannot exclude liability for death or personal injury caused by negligence

  s.2(2) for other loss/damage, cannot excluse liability for negligence, except in so far as is 'reasonable'

  s.2(3) terms excluding liability for breach of contract being subject to the requirement of 'reasonableness'
• s.11 the test of reasonableness

  • reasonable in light of what was known to the parties at the time of making the contract
  • trength of bargaining power of each party will be considered an opportunity to negotiate
  • must be reasonable in all the circumstances
  • whether one of the parties should have taken out insurance
  • whether c was included into agreeing to the term
  • resources available to d to otherwise pay the claim
• reasonable in light of what was known to the parties at the time of making the contract 


  (Smith v Eric S Bush)
• strength of bargaining power of each party will be considered and opportunity to negotiate

  (Watford Electronics v Sanderson) - reasonable since parties were of equal bargaining power and the limitation clause was subject to negotiation when the contract was made
• must be reasonable in all the circumstances

  (Warren v Trueprint)
• whether one of the parties should have taken out insurance

  (George Mitchell Ltd) - the clause was not reasonable
• whether c was induced to agreeing to the term

  or if in accepting the term, they had an opportunity of entering into a similar contract with other persons, but without having a similar term
• what does the Consumer Rights Act provide

  protection for consumers in trader-consumer contracts
• s.64 why are unfair terms on subject matter or price exempt from the test of fairness

  only if they're 'transparent' and 'sufficiently prominent'

  • this could be in any communication or announcement, as long as it is reasonable to assume it can be seen or heard by a consumer
  • (Office of Fair Trading) - must be in 'plain intelligible language' so a typical consumer would understand it
  • (Parking Eye) - parking fines that are not excessive or out of proportion with the claimant’s legitimate interests are not considered unfair
• bars on excusion clauses (never allowed)

  s.31 - cannot exclude implied terms with respect to sale of goods

  s.57 - cannot exclude implied terms for the supply of services

  s.65 - cannot exclude liability for death or personal injury resulting from negligence
• s.62 genereal fairness of terms

  • requirements for all consumer contract terms and notices to be fair
  • this fairness test is supplimented by a 'grey list' of terms
• examples of unfair contract terms

  • unbalanced rights
  • excessive cancellation fees
  • changing goods or services
  • changing the price
• unbalanced rights

  • Terms that give the trader certain rights that the consumer does not also enjoy
• excessive cancellation fees

  • Allowing the trader to take too much of your money if you back out of a contract can be unfair. 
  • If you want to end a contract, a trader can claim for administration and marketing costs and for any work they had started and loss of profit but no more.
• changing goods or services

  • A trader can't have a term that allows them to significantly change what you are buying without giving you the chance to withdraw from the contract
• changing the price

  • Seller's T&Cs may state your order is accepted only when it starts taking the items you've ordered off the shelves and you'll be charged the price of the goods at that time
  • However, a contract term that states you must pay a higher price if prices rise after you’ve ordered could be considered unfair
• will not be considered an unfair term if

  • You claim that a price you’ve agreed to pay is unfair because you found the same item cheaper elsewhere 
  • You claim a contract for an extended warranty is unfair because it offers much less cover than another one you could have bought for a similar price
  • Challenge terms that you have negotiated with the seller. You can only challenge a contract’s standard terms and conditions