Many local businesses have no written terms of business. Yet terms can help protect you by limiting and excluding your liability or legal risk in many important ways. In one recent case the courts looked at how these “exclusion clauses” work.

The court in the Balmoral Case held that exclusion clauses are valid if drafted within the law. The law is contained in the Unfair Contract Terms Act 1977 (“UCTA”and for contracts with consumers the Unfair Terms in Consumer Contracts Regulations 1999). UCTA and the 1999 Regulations say that any clause which tries to exclude liability for death or personal injury is completely void, so careful drafting is needed. It is no good just excluding all liability. That is worse than useless. In business contracts other exclusions are valid if they are reasonable.

In the recent Balmoral case the judge said that a clause saying if goods were defective the only remedy was for the supplier to exchange them or refund the price in the circumstances of this case was unfair and void. The case is a useful lesson to those involved that excluding liability too far can backfire. The Government is proposing a shake-up of the law in this area so now is a good time to have your standard conditions examined.

Contact us on 01491 572138 for advice on these Regulations.