Type: History
Pages: 3 | Words: 611
Reading Time: 3 Minutes

The unfair contract terms Act of 1977 is a legislative act of the United Kingdom that is geared towards regulating contracts mainly by checking the operations and redefining the authenticity of some contract provisions. It defines or deals with contractual obligations. It states liability.

The unfair contact Act has provision that deals with a contract term that seeks to restrict financial liability to a specific sum. Such provision offer useful guidelines for applying the reasonableness test. Where by reference a person seeks to restrict liability to a specific sum of money, the term of notice should satisfy the requirement of reasonableness. The person should also consider the resources available to for the purpose of meeting liability should it arise. The person should also explore the option of insurance cover. Where there is potential for liability and where the professional indemnity insurance cover is unobtainable of even extremely expensive, the professional person might reasonably limit the liability to an amount no greater than can be reasonably covered by the insurance cover that is available.

The Unfair Contract Term Act has a requirement for reasonableness. Though it is difficult to encounter a situation where valuares and the surveyors to attempting outright exclusion of liability towards client, such an attempt should be treated as “unreasonable” and hence ineffective by the virtue of the act. It would mean removing the obligation to observe real care on the side of the professional person. Unreasonable contract terms may ruin professions and hence it should be limited to advisers’ insurance cover. (Murdoch et el, 1996:206).

Unfair Contract Trade Act only applies to the context of private litigation between the concerned parties in regard to a particular contract. The reasonableness is useful in determine the parameters used to determine the value and avoid losses. The parties should put into consideration the circumstances that were reasonably known to the parties when they were making contract (Willet, 2007:152).

The UCTC is generally restricted to business liability, which is liability emanating form the actions perfumed during the business transactions or from the occupation of premises for business purposes. It excludes certain contract like land or those affecting the management of the company or their formation. As stipulated in the act, it is impossible to exclude in any way the business liability in contract or what has been referred to as tort for liability in case of death or even bodily injury that arises from negligence. In case of exemption, there has to be a written standard form of contract that is reasonable. If one party is consumer, the tests of reasonbleness will apply regardless of the form of contract. The 1977 Act is credited with giving guidelines that are useful in determining what is reasonable. It is important to consider the bargaining strength of the parties involved. It is important to consider whether the buyer has options such as prize reduction as whether there is provision for compliance with conditions such as time limit. The time limit for compliant should be reasonable. Such conditionality like time limit should be reasonable to the conditions and the circumstances of the purchased product (Mead et el:95).

In the case of exceptional clause, there is either full exclusion or limits the liability that s party would otherwise have in case of contract breach or other conduct that may call for action. There may be a clause that may restrict the liability. This may be by specifying a maximum financial limit on the compensation payable. The clause may also provide that parties that have faulted ceases to have any liability after a given timeframe. An example is where defect is discovered after an expiry of a given period of time (Fuller, 2002:85).

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