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Law Notes Contract Law Notes

Unfair Contract Terms Act 1977 Notes

Updated Unfair Contract Terms Act 1977 Notes

Contract Law Notes

Contract Law

Approximately 1511 pages

Contract law notes fully updated for recent exams at Oxford and Cambridge. These notes cover all the LLB contract law cases and so are perfect for anyone doing an LLB in the UK or a great supplement for those doing LLBs abroad, whether that be in Ireland, Hong Kong or Malaysia (University of London).

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Unfair Contract Terms Act 1977

1.— Scope of Part I.

  • (1) For the purposes of this Part of this Act, “negligence” means the breach—

    • (a) of any obligation,

      • arising from the express or implied terms of a contract,

        • to take reasonable care or exercise reasonable skill in the performance of the contract;

    • (b) of any common law duty to take reasonable care or exercise reasonable skill (but not any stricter duty);

    • (c) of the common duty of care imposed by the Occupiers' Liability Act 1957 or the Occupiers' Liability Act (Northern Ireland) 1957.

  • (2) This Part of this Act is subject to Part III; and in relation to contracts, the operation of sections 2 to 4 and 7 is subject to the exceptions made by Schedule 1.

  • (3) In the case of both contract and tort, sections 2 to 7 apply only to business liability,

    • that is 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;

  • (4) In relation to any breach of duty or obligation,

    • it is immaterial for any purpose of this Part of this Act

      • whether the breach was inadvertent or intentional, or whether liability for it arises directly or vicariously.

2.— Negligence liability.

  • (1) A person cannot by reference to any contract term or to a notice given to persons generally or to particular persons

    • exclude or restrict his liability for death or personal injury resulting from negligence.

  • (2) In the case of other loss or damage,

    • a person cannot so exclude or restrict his liability for negligence

      • except in so far as the term or notice satisfies the requirement of reasonableness.

  • (3) Where a contract term or notice purports to exclude or restrict liability for negligence

    • a person's agreement to or awareness of it

      • is not of itself to be taken as indicating his voluntary acceptance of any risk.

3.— Liability arising in contract.

  • (1) This section applies as between contracting parties where one of them deals as consumer or on the other's written standard terms of business.

  • (2) As against that party, the other cannot by reference to any contract term—

    • (a) when himself in breach of contract, exclude or restrict any liability of his in respect of the breach; or

    • (b) claim to be entitled—

      • (i) to render a contractual performance substantially different from that which was reasonably expected of him, or

      • (ii) in respect of the whole or any part of his contractual obligation, to render no performance at all,

        • except in so far as (in any of the cases mentioned above in this subsection) the contract term satisfies the requirement of reasonableness.

4.— Unreasonable indemnity clauses.

  • (1) A person dealing as consumer cannot by reference to any contract term

    • be made to indemnify another person (whether a party to the contract or not)

      • in respect of liability that may be incurred by the other for negligence or breach of contract,

        • except in so far as the contract term satisfies the requirement of reasonableness.

  • (2) This section applies whether the liability in question—

    • (a) is directly that of the person to be indemnified or is incurred by him vicariously;

    • (b) is to the person dealing as consumer or to someone else.

5.— “Guarantee” of consumer goods.

  • (1) In the case of goods of a type ordinarily supplied for private use or consumption, where loss or damage—

    • (a) arises from the goods proving defective while in consumer use; and

    • (b) results from the negligence of a person concerned in the manufacture or distribution of the goods,

      • liability for the loss or damage cannot be excluded or restricted by reference to any contract term or notice contained in or operating by reference to a guarantee of the goods.

  • (2) For these purposes—

    • (a) goods are to be regarded as “in consumer use”

      • when a person is using them, or has them in his possession for use,

        • otherwise than exclusively for the purposes of a business; and

    • (b) anything in writing is a guarantee if it contains or purports to contain some promise or assurance (however worded or presented)

      • that defects will be made good by complete or partial replacement, or by repair, monetary compensation or otherwise.

  • (3) This section does not apply as between the parties to a contract under or in pursuance of which possession or ownership of the goods passed.

6.— Sale and hire-purchase.

  • (1) Liability for breach of the obligations arising from—

  • (2) As against a person dealing as consumer, liability for breach of the obligations arising from—

    • (a) [section 13, 14 or 15 of the 1979 Act]2 (seller's implied undertakings as to conformity of goods with description or sample, or as to their quality or fitness for a particular purpose);

    • (b) section 9, 10 or 11 of the 1973 Act (the corresponding things in relation to hire-purchase),

      • cannot be excluded or restricted by reference to any contract term.

  • (3) As against a person dealing otherwise than as consumer, the liability specified in subsection (2) above can be excluded or restricted by reference to a contract term, but only in so far as the term satisfies the requirement of reasonableness.

  • [(4)]

[Section 7 omitted]

[Section 8 repealed]

9.— Effect of breach.

  • (1) Where for reliance upon it a contract term has to satisfy the requirement of reasonableness,

    • it may be found to do so and be given effect accordingly

      • notwithstanding that the contract has been terminated either by breach or by a party electing to treat it as repudiated.

  • (2) Where on a breach the contract is nevertheless affirmed by a party entitled...

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