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You are here: BAILII >> Databases >> The Law Commission >> UNFAIR TERMS IN CONTRACTS (A Joint Consultation Paper) [2002] EWLC 166(7) (3 July 2002) URL: http://www.bailii.org/ew/other/EWLC/2002/166(7).html Cite as: [2002] EWLC 166(7) |
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Part VII
non-contractual notices excluding business liability for negligence or breach of duty
7.1 In Part III we saw that UCTA section 2 [s 16[1]] applies not only to contractual terms that purport to exclude or restrict a business’s liability[2] for negligence [breach of duty] but also to notices that purport to do the same in respect of claims in tort [delict]. Notices that purport to exclude or restrict liability for death or personal injury are of no effect; exclusions or restrictions of liability for other loss or damage may be valid if they are fair and reasonable.
7.2 We have provisionally proposed that any contract term which excludes or restricts liability for death or personal injury caused by negligence [breach of duty] should be of no effect when it is in either a consumer contract[3] or a business-to-business contract.[4] Terms purporting to exclude or restrict business liability for other loss or damage will continue to be subject to a reasonableness test.[5] We believe that it is important to maintain the existing controls over notices which might otherwise exclude a business’s liability in tort [delict] to persons with whom it does not have a contractual relationship and who are killed, injured or harmed by its negligence [breach of duty].
7.5 At present a term of a consumer contract which excludes or restricts liability for negligence [breach of duty] will fall within UTCCR and, if the term is unfair, action can be taken to prevent its use. Non-contractual notices excluding liability in tort [delict] fall outside this.[6]
7.6 Although notices of this kind may be of no effect at all, or of no effect unless they are fair,[7] we believe that they may deter claimants who have suffered injury or loss and who do not know that the notice is invalid. In this respect they are no different to other potentially invalid contract terms.[8] We think that they are likely to continue to be used, despite their ineffectiveness as a matter of law, unless steps can be taken to prevent their use. Therefore we consider that it would be useful if the various bodies listed in UTCCR Schedule 1 (as amended) could act to prevent the use of such notices.[9]
[1]In its original form Part II of UCTA did not apply to non-contractual notices disclaiming liability in delict. The relevant amendments were made by the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990, s 68.
[2]There is a difference between England and Scotland as to what counts as business liability. Business liability includes liability arising from the occupation of land for business purposes, but in England there is an exception where the injured party was allowed access to the land for recreational or educational purposes not connected to the occupier’s business. This exception does not apply under Scots law. Moreover, under the Occupiers’ Liability (Scotland) Act 1960, s 2(1), the statutory obligation to take reasonable care can only be altered by a contractual term: a non-contractual notice is ineffective.
[3]See para 4.35 above.
[4]Para 5.8 above.
[5]See paras 4.40 and 5.42 above.
[6]Unless the arrangement between the occupier and the claimant is to be treated as a “contract” for the purposes of the Directive; see para 3.107 above.
[7]See para 6.1 above.
[8]Cf para 3.119 above.
[9]This would not of course oblige the bodies authorised to incur expenditure policing such notices. They could merely deal with complaints made to them.
