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Saturday, 10 June 2017

Busimess Law Questions: VALIDITY OF CONTRACT TERMS UNDER UCTA 1977

Questions

1             To what types of clause does UCTA apply?

2             If a clause doesn’t fall within UCTA, are there any other ways that someone might challenge its fairness?

3             ‘Section 2 of the Act is tied to a particular type of behaviour; sections 6 is tied to particular types of terms in particular types of contracts; section 3 is of much more general application.’
Explain.

4             When is possible to exclude liability for misrepresentation?

5             In the majority of cases the validity of an exemption clause under UCTA turns on whether it satisfies the requirement of reasonableness. Is this an unpredictable exercise of discretion, devoid of clear principle? 

6             Which provisions, if any, of the Act would apply to the following clauses?
(a)         ‘Sellers undertake to use their best endeavors to meet the delivery date of 15th August but they are to be under no liability if they cannot do so for reasons beyond their control.’

(b)         ‘In the event of the works not being completed by the specified date (otherwise than for reasons beyond the Builder’s control) the Builder shall pay to the Owner the sum of £500 per day while the works remain uncompleted.’

(c)         ‘Complaints about conformity of goods delivered under the contract will only be entertained if made within one month of delivery.’

7             A clause in a contract for the refurbishment of small office premises provide as follows:

‘10       Owner will make the specified payments for each stage on receipt of a certificate of completion from the Builder’s surveyor and there will be no right to withhold any such payment for any reason whatever.’

Most of the Builder’s contract form is copied from that of the Construction Association but this clause was added by Fred, the managing director, who is doing a part-time law course at the University of Middletown.

To what extent is this clause vulnerable under the Unfair Contract Terms Act?

8             Buyer contracts to buy from Seller a quantity of second hand industrial electric motors of various types.  The contract provides:

‘Buyer agrees that he has seen, tried and inspected the goods and Seller gives no warranty or undertaking whatsoever in respect of any matters which would not be revealed by such trial or inspection. Goods to be taken with all faults.’

Buyer did in fact make a fairly detailed inspection. A short while after delivery, Buyer discovers that a number of the motors (type I) have such serious defects (which would not have been revealed without stripping them down) that they are not economically repairable. A number of other motors (type II) turn out to be the property of Xerxes, who successfully reclaims them from Buyer.
Advise B.

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