Negligence. s2, liability for negligence occasioning death or personal injury cannot be excluded. Manufacturers' guarantee. s5, loss arising from defective goods or negligence of distributor cannot be excluded where goods are "of a type ordinarily supplied for private use or consumption". Sale of goods
Negligence. s2, exclusion of liability for all types of negligence 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 ) or performance under a contract which is substantially or totally different of that which is reasonably expected of him ) 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, Implied terms as to description, quality and sample 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, The Act only applies to "liability for breach of obligations or duties arising from things done or to be done by a person in the course of a business ; or 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
s12, He is not in the course of a business and does not hold himself to do so.
s12, the other party is in the course of a business.
s12, In a contract for sale of goods, the goods are of a type "ordinarily supplied for private use or consumption"
s12, A party is not a consumer if dealing at an auction where he has the opportunity to attend in person or is not a natural person buying auction.
s12, Burden is upon the party purported to be acting in the course of a business to show that either he is not in the course of a business or that the other party is otherwise not a consumer.
Definition of ''reasonableness''
Section 11 provides some guidance but most development has been in common law. Schedule 2 gives guidelines specifically to ss 6, 7, 7. Case law
Stewart Gill Ltd v Horatio Myer & Co Ltd provides that reasonableness is assessed at the time of contract; and that the burden of proof is upon the party purporting to have excluded liability.
Levison v Patent Steam Carpet Cleaning Co Ltd provides that clarity and preciseness will raise the reasonableness of a term; and vice versa. See also Stag Line Ltd v Tyne Ship Repair Group Ltd as to small print.
Smith v Eric S Bush. Lord Griffith provides four points that may be considered :
*Equality of bargaining powers.
*How practical was it to obtain independent legal advice regarding the term?
*How difficult is the task being undertaken for which liability is being excluded?
*What are the practical consequences of ruling that a term is unreasonable?
