Given that the question scenario clearly states that the exclusion clause was incorporated into the contract between Andy and Bash Ltd (and there can be no doubt that it is), it is only necessary to consider the effect of the clause. On the basis of the clear wording, it would appear that the wording of the exclusion clause is suffi ciently clear and specifi c to cover Bash Ltd’s negligence. As a consequence, it only remains to consider how the legislation governing exclusion clauses would be likely to deal with this particular clause in the context of the question.
The Unfair Contract Terms Act 1977 (UCTA) is the original statutory attempt to control exclusion clauses. The original Unfair Terms in Consumer Contracts Regulations (UTCCR) were enacted in 1994 to implement the European Unfair Contract Terms Directive and were subsequently replaced by the current regulations in 1999.
Section 2(1) of UCTA provides an absolute prohibition on exemption clauses in relation to liability in negligence resulting in death or injury. It is therefore apparent that Bash Ltd cannot avoid responsibility for the injury sustained by Andy and will be liable for the injuries and the consequential loss he suffered.
Section 2 also provides that any exemption clauses relating to liability for other damage caused by negligence will only be enforced to the extent that they satisfy the ‘requirement of reasonableness’; and s.11 provides that the requirement of reasonableness means ‘fair and reasonable ... having regard to the circumstances ...’.
In looking at the circumstances of the case the court will take into account matters relating to the relative strength of bargaining power: inducements to accept the restrictions: whether the customer knew or ought to have known of the exclusion: whether the goods involved were specially made or adapted. The fi nal outcome, therefore, is dependent on judicial interpretation. The onus of showing reasonableness rests with the party relying on the clause (St Alban’s CDC v International Computers Ltd (1994)). If one were to ask the question: ‘Was it reasonable for Bash Ltd to deny responsibility for the consequence of their negligence in this case?’ the answer is likely to be no. Consequently Bash Ltd is likely to be liable for all the damages consequent upon its vicarious
negligence, and the exclusion clause to have no effect (see George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd (1983) and Smith v Bush (1989)).
Although the Unfair Terms in Consumer Contracts Regulations 1999 do not affect the outcome of the situation in any material way, it is worth mentioning them at this point. The regulations are potentially wider in scope than UCTA, in that they cover all terms and not just exclusion clauses. Regulation 3(1) states that it applies to ‘any term in a contract concluded between a seller or supplier and a consumer where the term has not been individually negotiated’. Under regulation 4(i), a term is unfair ‘if contrary to the requirements of good faith, it causes a signifi cant imbalance in the parties’ rights and obligations arising under the contract to the detriment of the consumer’. Consequently reg.5(1) provides that if a term is found to be unfair it will not be binding on the consumer, although the remainder of the contract will continue to operate if it can do so after the excision of the unfair term. |
