Citation 1977 c 50 | Royal assent 1977 | |
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Long title An Act to impose further limits on the extent to which under the law of England and Wales and Northern Ireland civil liability for breach of contract, or for negligence or other breach of duty, can be avoided by means of contract terms and otherwise, and under the law of Scotland civil liability can be avoided by means of contract terms. Territorial extent England and Wales; Scotland; Northern Ireland | ||
The Unfair Contract Terms Act 1977 (c 50) is an Act of Parliament of the United Kingdom which regulates contracts by restricting the operation and legality of some contract terms. It extends to nearly all forms of contract and one of its most important functions is limiting the applicability of disclaimers of liability. The terms extend to both actual contract terms and notices that are seen to constitute a contractual obligation.
Contents
- Terms rendered ineffective
- Terms subject to reasonableness
- Definition of consumer and business
- Definition of reasonableness
- References
The Act renders terms excluding or limiting liability ineffective or subject to reasonableness, depending on the nature of the obligation purported to be excluded and whether the party purporting to exclude or limit business liability, acting against a consumer.
It is normally used in conjunction with the Unfair Terms in Consumer Contracts Regulations 1999 (Statutory Instrument 1999 No. 2083), as well as the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982.
The Law Commission and the Scottish Law Commission have recommended that the Unfair Terms in Consumer Contracts Regulations 1999 and the Unfair Contract Terms Act 1977 should be replaced by a more unified and coherent regime.
Terms rendered ineffective
Negligence. s2(1), liability for negligence occasioning death or personal injury cannot be excluded.
Manufacturers' guarantee. s5(1), loss arising from (a) defective goods or (b) negligence of distributor; cannot be excluded where goods are "of a type ordinarily supplied for private use or consumption."
Sale of Goods
Terms governed by the Consumer Protection Act 1987.
They are also governed (since 2007) by the Occupiers Liability Act 1984.
Terms subject to reasonableness
Negligence. s2(2), exclusion of liability for negligence other than for death or personal injury must satisfy the requirement of reasonableness.
Contractual Liability. s3, This applies against a party that deals on standard written terms or where the other party deals as a consumer. Any exclusion by that party for liability arising from a breach committed by that party under the same contract (s3(2)(a)) or performance under a contract which is substantially or totally different of that which is reasonably expected of him (s(3)(b)) shall be void except insofar as it satisfies the requirement of reasonableness.
Indemnity clauses. s4, A party dealing as a consumer cannot contract to indemnify a third party on behalf of the other party, except insofar as it satisfies the requirement of reasonableness.
Sale of Goods. s6(3), Implied terms as to description, quality and sample (Sale of Goods Act 1979 ss 13-15) may only be reasonably excluded where neither party is dealing as a consumer.
Misrepresentation. s8, substitutes the Misrepresentation Act 1967 s3. Under that post-1979 section, an exclusion of liability for misrepresentation must satisfy the requirement of reasonableness.
Definition of consumer and business
Business. s 1(3), The Act only applies to "liability for breach of obligations or duties arising (a) from things done or to be done by a person in the course of a business (whether his own business or another's); or (b) from the occupation of premises used for business purposes of the occupier". s14, Includes any government department.
Consumer. s 12, A party deals as a consumer if
Definition of reasonableness
Section 11 provides some guidance but most development has been in common law.
Schedule 2 gives guidelines specifically to ss 6(3), 7(3), 7(4).
Common Law