STATUTES
| DOI | http://doi.org/10.1111/j.1468-2230.1978.tb00803.x |
| Date | 01 May 1978 |
| Published date | 01 May 1978 |
STATUTES
UNFAIR CONTRACT TERMS ACT
1977
BRIEF notes
on
large subjects have their problems. The Unfair Con-
tract Terms Act
1977
raises
so
many issues that selection has been
imperative and a narrative account of the Act impossible. This note
is confined to Part
I
of the Act, which deals with “non-
international
”
contracts under the law of England, Wales and
Northern Ireland.
First
Impressions
Apart from some peculiarities of drafting (and especially the way
in which an apparently similar legislative intention is in some cases
expressed differently in the English and Scottish Parts respectively),’
two features of the Act strike one immediately. The first is that,
while the controls imposed
on
exemption and similar clauses are
extensive, they are still only partial. Their incidence is made to
depend on the nature of the transaction, the status of the parties,
the nature of the liability or obligation affected, and the type of
clause employed. Where the controls do apply their effect varies
between a total negation and a requirement of reasonableness. One
result of all this is that in respect of a wide range of transactions
the Act makes no change to the existing law. Even when controls
do apply the relevant terms, and the contracts in which they appear,
will, of course, still need to be interpreted and construed. It follows
that little,
if
any, of the current learning on exception clauses has
been rendered obsolete, at least overtly.
The other immediately apparent feature of the Act is that it has
been drafted
on
the firm premise that exception clauses do not
affect the accrual of obligation but operate only as defences to
accrued rights of action.2 Even when the Act refers to the limita-
tion or exclusion of an obligation or duty it presupposes that the
obligation or duty is owed by the proferens, and that he seeks to
rely on the relevant term only as a defence. By according to all
exception clauses a uniform character and function this premise
enables them all to be treated alike. It also appears to provide a
uniform justification for the imposition of controls. Its disadvantages
are that
it
tends to obscure the relationship between exception
clauses on the one hand and alternative methods of securing the
1
The Act is the result
of
a
private member’s bill, Part
I1
(Scotland) being added
on Government initiative during the passing
of
the bill through the legislature. It is,
of
course, based on the Second
Report
on Exemption
Clauses
of
the Law Com-
missions (1975, Law Corn.
No.
69; Scot. Law Com.
No.
39).
2
The opposite view, that
a
limitation
or
exclusion
of
liability
ips0
jacfo
limits the
corresponding right
or
obligation,
or
prevents its accrual respectively, is argued in
Coote,
Exception
Clauses
(1964) Chap.
I
and Appendix.
More
recent dicta supporting
that analysis are listed in Coote [1970] C.L.J. 221, 229 (note
55)
and (1977) 40
M.L.R.
31,
35 (note 21),
38
(note 35).
312
May
19781
STATUTES
313
same results on the other.
It
tends, too, to obscure the actual
consequences of the controls imposed.
Control in Relation
to
Obligation
The ostensible intention of the Unfair Contract Terms Act is to
create controls over the use of particular drafting techniques and,
in
so
doing,
to
extend the incidence of the tort of negligence and
of certain implied-by-law terms and, in respect of consensual con-
tract terms, to limit freedom
of
contract. At first sight, the case for
controlling the use of exception clauses which purport to exclude
or restrict tort liability, or the application of implied-by-law terms,
seems self-evidently strong. It is very easy to see these two types of
obligation as community-imposed minimum requirements, which
should be and are imposed independently of private will. In fact,
though, the common law has never taken this last view. There are
very few acts which give a claim in tort to a person who authorised
or consented to them.3 It has sometimes been thought that negligence
was in
a
different position, because of the difficulty of foreseeing a
particular negligent act.* The answer to this, of course, is that it is
not the consent as such to a particular act which prevents its being
a tort, but the absolution from duty and the assumption of legal risk
which consent or permission
imp lie^.^
An agreement which negates
the duty of care or, what in law has the same effect, absolves from
legal liability for carelessness, is just as clearly an assumption of
legal risk as is consent to a precise act of negligence.6 Similarly,
there are very few implied-by-law terms which the law will impose on
the parties in the face of
a
contrary intention expressed in their
contract.5 An exclusion of an implied term is as clear
a
way of
expressing a contrary intention, and hence of preventing implica-
tion,8 as is an express promise dealing in positive terms with the
relevant subject matter.9
When it comes to consensual terms, whether express or implied,
there can no longer be any question of protecting the incidence of
minimum obligations imposed by law
ab extra.
Outside the implied-
by-law terms, contractual obligation
can
arise only to the extent
that it has been assumed. Control can be concerned solely with the
-1
3
Fraud
is
an established exception:
Pearson
v.
Dublin Corporation
[
19071 A.C.
351. Just possibly, the criminal infliction in some circumstances
of
grievous bodily
harm, may be another:
Winfield and
Jolowicz
on Tort
(10th ed., 1975), p. 620.
4
Wooldridge
v.
Sumner
[1963] 2
Q.B.
43, 69,
per
Diplock L.J.:
Winfield and
Jolowicz
on
Tort
(10th ed., 1979, p. 616
5
Salmond
on
Torts
(16th ed., 19731, p. 511.
6
Fleming,
The Law
of
Torts
(5th ed., 1977), pp. 279
et
seq.,
77
et
seq.;
Winfield
and lolowicz
on
Tort
(10th ed.,
WS),
p. 615.
7
The terms implied by the Supply
of
Goods (Implied Terms) Act 1973 are an
exception and may be contrasted with the equivalent terms implied by the Sale
of
Goods Act 1893.
8
e.g. Wallis
v.
Praft
[1910] 2
K.B.
1003, 1016,
per
Fletcher Moulton L.J.;
Kenyon
Son
&
Craven Lid.
v.
Baxter Hoare
&
Co. Lrd.
[1971] W.L.R. 519, 522 (Donaldson
J.’s
“
first
”
category).
9
e.g.
Cosmopolitan Shipping
Co.
v.
Hatton and Cookson
(1929) 35 Com.Cas.
113,
117-118,
per
Scrutton L.J.
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