Exclusion Clauses: Statutory Controls

• The Consumer Rights Act 2015 applies to breaches of contracts between businesses and consumers
• Section 31 - Sale of goods; A term excluding liability for the following is not permitted

  • s.9 - Can't exclude that goods be of satisfactory quality
  • s.10 - Can't exclude that goods be fit for a particular purpose
  • s.11 - Can't exclude that goods match the description
• Section 57 - Supply of services; A term excluding liability for the following is not permitted

  • s.49 - Service must be performed with reasonable care and skill
  • s.51 - Reasonable price to be paid for a service
  • s.52 - Service must be performed in a reasonable time period
• Section 62 - General Fairness

  • The term will not be considered unfair as it removes the customer's rights without good reason and without giving anything back to them
  • s.62(4) defines unfair terms as 'those which put the consumer at a disadvantage, by causing a significant imbalance and detriment to the consumer'
• Section 65 - Prohibitions

  • Prohibits exclusion or restriction of liability for death or personal injury resulting from negligence
• The fairness test is supplemented by grey terms - apply under s.62:

  • Disproportionate financial sanctions
  • Binding consumers to hidden terms
  • Retaining payments after consumer cancellation
• The Unfair Contract Terms Act 1977 applies to breaches of contract between business to business
• Exclusions made void by the act:

  • s.2(1) - A person cannot exclude liability for death or personal injury caused by negligence
  • s.2(2) - A person cannot exclude their liability for negligence except if it is reasonable to do so
  • s.6(1) - A clause cannot be inserted into a contract which means these elements do not apply
• The reasonableness test is outline in s.3, the guidelines for what is reasonable are outline in s.11

  • s.11(1) - Knowledge test; Insertion of terms must be reasonable in light of what the parties were aware of (Smith v Eric Bush)
  • s.11(2) - Factors to be considered; Bargaining power, was the customer given an inducement to accept the term, whether the customer knew/ought to have known of the term, were the goods made to the special order of the customer (Watford Electronics v Sanderson)
  • s.11(4) - Limitation clauses; The resources which D could expect to be available, if D insured themself