Making More Use of the Unfair Contract Terms Act 1977: Stewart Gill Ltd v Horatio Myer & Co Ltd
| Published date | 01 January 1993 |
| Date | 01 January 1993 |
| DOI | http://doi.org/10.1111/j.1468-2230.1993.tb02858.x |
| Author | Edwin Peel |
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Modern
Law
Review
[Vol.
56
Making More Use of the Unfair Contract Terms
Act
1977:
Stewart Gill Ltd
v
Horatio Myer
&
Co
Ltd
Edwin
Peel”
In 1984 Lord Justice Slade was surprised to find that there had been only one reported
case in which
the
By those standards, there has recently been something of a flurry of cases,* the
latest of which is Stewart Gill Ltd v Horatio Myer
&
Co
Ltd.3 The decision of the
Court of Appeal raises a number of interesting issues regarding the scope and
operation of the Act.
The Facts
In Stewart Gill, the defendants entered into a contract with the plaintiffs for the
installation of an overhead conveyor system at a price of 2266,400. The final 10 per
cent of the price was to be paid as to
5
per cent upon completion and
5
per cent
30
days thereafter. On completion, the defendants withheld the final 10 per cent
alleging breaches of contract by the plaintiffs that gave rise to cross-claims which
exceeded and could be set off against the amount claimed.
The plaintiffs applied for summary judgment and sought to exclude the defendants’
right of set-off by reference to the following term of the contract:
12.4
The Customer shall not be entitled to withhold payment of any amount due to the
Company under the Contract by reason of any payment credit set off counterclaim allegation
of incorrect or defective Goods or for any other reason whatsoever which the Customer may
allege excuses him from performing his obligations hereunder.
It was not disputed that Clause 12.4 was incorporated into the contract, but the
defendants argued that the clause was caught by the provisions of UCTA and, being
unreasonable, could not be relied upon by the plaintiffs.
The Applicability
of
the Act
A clause which purports to exclude the defendant’s right of set-off does not operate
to exclude or restrict the liability of the plaintiff. The defendant is still entitled to
pursue his claim as a counterclaim. However, it will have the effect of preventing
the defendant from relying upon the right of set-off as a defence to an application
*Solicitor, St John’s College, Oxford.
I
am grateful to Professor Horton Rogers and Professor Roger Brownsword for their very helpful comments
upon an earlier draft of this note.
Phillips Products Lrd
v
Hyland
[I9871
1
WLR
659, 661.
The case in question was
George Mitchell
(Chesrerhall) Lrd
v
Finney Lock Seeds Ltd
[I9831 2
AC
803
which was actually decided under
s
55
of the Sale of Goods Act
1979
(now superseded
by
the Unfair Contract Terms Act
1977).
Viompson
v
T.
khan
(Plant Hire) Lrd
[1987]
1
WLR
649;
R
&
B Customs Brokers Co Ltd
v
United
Dominions Trust Ltd
[
19881
1
WLR
321;
Davies
v
Parry
[
19881 20
EG
92;
Singer
(UK)
Ltd
v
Tees
&
Hartlepool Port Aurhority
[I9881 2
Lloyd’s Rep
164;
Smith
v
Eric
S.
Bush
[1989] 2
All
ER
514;
The Flammar Pride
[I9901
1
Lloyd’s Rep
434;
Johnstone
v
Bloomsbuty
HA
[I9911
2
WLR
1362;
Tudor Grange Holdings Lrd
v
Ciribank
NA
[I9911 4
All ER
1.
119921
2
All ER
257.
1
2
3
98
0
The
Modern
Law
Review
Limited
1993
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