OCR A2 Law - The Law of Contract - Exclusion Clauses (6)

The Unfair Contract Terms Act 1977 (UCTA): This piece of legislation has provided wide consumer protection in that the issue of unequal bargaining strengths have been addressed. It does this by: Making some clauses 'automatically valid' and making some clauses 'void unless reasonable'.Auto Void: S2 (1) -  Any clauses which exclude/limit liability for death and or personal injury is VOID (arises through negligence); S6 (1) (2) -  Applies to C2B contracts - Any clauses which exclude/limit liability 'given under' S5 12/13/14/15 of Sale of Goods Act '79 is auto void; S7 (2) -  Repeats S6 (2) but applies when goods areh hired.Void unless reasonable: S2 (2) - Any clauses which exclude/limit liability for 'loss' or 'damage' to property is void unless reasonable; S3 - Any clauses in a standard form contract which say a party can perform the contract in different way or not at all is void unless reasonable; S6 (3) - This applies to B2B contracts. Any clause which exclude/limit liabilty given under S's 12/13/14/15 of the SGA is void unless reasonable; S7 (3) - Repeats 6 (3) but applies where goods are hired.Test of reasonableness: Section 11 of UCTA state reasonable clauses are fair and reasonable in the circumstances of the case. However, the definition of 'fair and reasonable' is far too vague ... guidelines have been given in Schedule 2 of the Act. They are:Bargaining strengths of the parties; assess if there have been negotiations; assess if goods were made to a special order. Judges have added to this in the later CASE: of "Mitchell v Finney". In this case there was a contract for the supply of cabbage seeds but the defendant was sent the wrong cabbage seeds and suffered a loss of £61,000. HELD: Unreasonable clause.HofL added fault and insurance to the guidelines. CASE: "Smith v Bush". In this case a surveryor had negligently overvalued a house and a clasue in the contract stated they wouldn't be liable for negligence. HELD: Unreasonable as he should have had insurance to cover this and he was at fault.