Unfair contracts

While express terms in a contract are advisable, some are of no value at all, and in fact can work against the author. An example is an unfair contract term that may be included, but if it is not sufficiently brought to the attention of the other party before the contract is made, it is not enforceable. 

Unfair Contract Terms Act 1977, section 2 Consumer Protection Act 1987, section 7. 

Unfair Contract Terms Act 1977, Section 2 Consumer Protection Act 1987. Section 7 The Unfair Terms in Consumer Contracts Regulations 1994, Schedule 3, paragraph 1(a). 

Section 2 of the Act makes a change to the Unfair Contract Terms Act so that where an occupier allows someone to enter his business premises for purposes that are recreational or educational and not connected with the business itself then the occupier may rely on the use of an appropriately worded exclusion clause or notice. 

Suppose that a term in a holiday contract says that a person may have to share a room if the tour operator so decides instead of getting the single room that he has booked. Under the Unfair Contract Terms Act, this type of clause will not be valid unless the tour operator can prove that it is reasonable. The assumption in all cases is that a clause is unreasonable until the contrary is proved. 

Lawson, R. G. Advertising Law in the United Kingdom, Macdonald Evans, Plymouth (1978) Lawson, R. G. Exclusion Clauses after the Unfair Contract Terms Act, Oyez, London (1983) Irving, R. Outline of the Law of Product Liability and Consumer Protection, B. Rose Publishers Ltd, Chichester (1980)... 

Prior to the Consumer Protection Act a very limited form of strict liability existed in the form of statutory liability in contract arising from the direct supply of defective products. This is defined by the Sale of Goods Act 1893 as amended by the Supply of Goods (Implied Terms) Act 1973 (now consolidated into the Sale of Goods Act 1979) and the Unfair Contract Terms Act 1977. 

The introduction of clauses into sales agreements whereby another party accepts responsibility for the costs of a particular loss is an alternative risk transfer strategy. However, it should be noted that the conditions of the agreement may be affected by the Unfair Contract Terms Act 1977 and the interpretation placed on reasonableness. ... 

Law of Contract as it relates to relations between employers and employees suppliers and customers owners/occupiers of premises and visitors unfair contract terms in relation to civil and statutory liability for possible injury. 

It was stated at the start of this chapter that a software house will often try to use a standard form contract in its dealings with its commissioning clients. Section 3 of the Unfair Contract Terms Act contains special provisions for standard form contracts. In the present context it provides that a software house using a standard form contract carmot, again unless it is reasonable to do so,... 

There are a number of cases on the Unfair Contract Terms Act and on the requirement of reasonableness. The cases must, however, be treated with caution for the decision in each turns on its facts and just because one case is decided one way it does not mean that all others will follow. One example is St Albans City and District Council v International Computers Ltd [1996] 4 All ER 481. The facts were that the council had ordered a computer system from ICL to enable them to compute the Community Charge for the forthcoming year. ICL insisted on using its standard terms and conditions which stated that its liability will not exceed the price or charge payable for the item of Equipment, Program or Service in respect of which liability arises or 100,000 (whichever is the lesser)... . Errors in the software and incorrect advice from ICL s project manager resulted in an overestimate of the population of the area, an undercharge of residents and a loss to the council of 1.3 million. 

The responsibility of occupiers of land to those who enter the premises is to be found in fhe Occupier s Liability Acts of 1957 and 1984. The 1957 Act covers both tortious and contractual liability. The basic obligation is that the occupier owes a common duty of care to see that the premises are reasonably safe for fhe purpose for which the visitor has been permitted to enter (s. 2). It is possible, of course, for any contract that may exist between the occupier and the visitor to state a higher duty of care than that of s. 2. But under the Act it was possible for the occupier to exclude this basic duty by a suitably worded exclusion clause in a contract or by a nohce (Ashdown v. Samuel Williams Sons ). But the Unfair Contract Terms Act... 

The Misrepresentation Act 1967 Contract of Employment Act 1972 Equal Pay Act 1970 and 1975 Sex Discrimination Act 1975 and 1986 Race Relations Act 1976 Sale of Goods Act 1979 Unfair Contract Terms Act 1977 Occupier s LiabUity Acts 1957 and 1984 Health and Safety at Work etc. Act 1974 Supply of Goods and Services Act 1982 Consumer Protection Act 1987 Equal Pay (Amendment) Regulations 1983 Social Security Act 1986... 

At one time, particularly in the field of the sale of goods, the small print of the contract would often contain clauses, usually called exclusion clauses, which took away from the consumer the rights given him under such legislation as the Sale of Goods Acf. The use of such clauses is now subject to the controls imposed by the Unfair Contract Terms Act 1977 and the Unfair Terms in Consumer Contracts Regulations 1999 . 

Unlike the Unfair Contract Terms Act, the Regulations do not automatically render any terms void, but the range of clauses dealt with is wider than in the Act. At the same time the scope of the Regulations is narrower because they only cover consumer contracts. The Regulations apply to all contracts made between an individual and a business which have not been individually negotiated. 

Lawson, R.G. Exclusion clauses and unfair contract terms. Sweet and Maxwell, London (2005) Abbott, H. Product safety. Sweet and Maxwell, London (1996)... 

Certain clauses (so-called exclusion clauses ) are commonly relied on to exclude or restrict the liability of a party arising through the failure to perform a contract. The Unfair Contract Terms Act 1977 limits this ability to exclude or restrict liability in certain contracts. In particular, it is never possible to exclude or restrict liability in negligence, or in relation to failure to take reasonable care in the performance of a contract, for personal injury or death by reference to any contract term. A contract sets the parameters of liability, and the rules of privity (i.e. only a party to the contract is able to sue) limit the persons who can claim for loss or damage under a contract. Where, however, a duty of care can be established between a person who has manufactured or supplied a product and the person injured then this injured party may be able to sue in tort for the negligence of the manufacturer or supplier (FaUa, 1997). 

On 1 July 1995 the Unfair Terms in Consumer Contracts Regulations came into force. They only apply to consumer contracts and not to business contracts. Unlike the Unfair Contract Terms Act 1977 the regulations apply to all unfair contract terms and not just unfair exception... 

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