Question 1

A 'course of dealing' between parties may allow a term excluding or limiting liability to be implied into a contract?

Accepted Answer

A course of dealing is a longstanding and consistent pattern of conduct between parties in a business relationship when conducting transactions. If a course of dealing has established a certain practice or understanding between the parties, this may allow a term excluding or limiting liability to be implied into a contract.

Question 2

In Olley v Marlborough Court Hotel the court was asked to consider whether an exclusion clause displayed in a hotel room was incorporated into the contract signed by the hotel guest at the reception desk.

Accepted Answer

The court in Olley v Marlborough Court Hotel considered whether the exclusion clause was incorporated into the contract, concluding it was not, as it was not brought to the guest's attention at the time of contract formation.

Question 3

A court would consider that there was a 'course of dealing' between parties after two transactions between them in the same year?

Accepted Answer

A 'course of dealing' typically requires a consistent and repetitive pattern of behavior over a longer period or multiple transactions, not just two.

Question 4

Exclusion clauses cannot be effective unless they are reproduced in full in every contract?

Accepted Answer

While it is generally recommended to include exclusion clauses in full in every contract, it is not necessarily required. However, the language of the clause must be clear and prominent enough so that a reasonable person would have noticed it and understood its implications. In some cases, exclusion clauses may also be subject to regulations or laws that govern their use and enforceability.

Question 5

The courts will seek to read an exclusion clause as liberally as possible.

Accepted Answer

The courts will seek to read an exclusion clause as narrowly as possible in favor of the party who did not draft the contract.

Question 6

In principle, at common law, a well worded exclusion clause could effectively exclude all possible types of liability?

Accepted Answer

At common law, a well worded exclusion clause can effectively exclude all types of liability, although there might be specific statutory provisions or public policy concerns that limit the use and enforceability of such clauses in certain situations. However, the wording of the clause must be clear and unambiguous, and it must cover the specific type of liability that is sought to be excluded.

Question 7

The Unfair Contract Terms Act 1977 applies only to contracts between a business and a private individual?

Accepted Answer

The Unfair Contract Terms Act 1977 applies to contracts between businesses and both individuals and other businesses. It provides protection against unfair contract terms and ensures that contractual responsibilities and liabilities are distributed fairly between the parties involved.

Question 8

The Unfair Contracts Terms Act 1977 could be used to strike out a term in a contract for the sale of a leasehold property?

Accepted Answer

The answer of The Unfair Contracts Terms Act 1977 could...

Question 9

The Unfair Contract Terms Act 1977 could be used to strike out an unfair term in a contract to transfer the copyright in a book to a publisher?

Accepted Answer

The Unfair Contract Terms Act 1977 primarily regulates the use of exclusion clauses to limit liability and does not directly apply to the fairness of terms regarding the transfer of copyright in a book to a publisher. Matters related to copyright would be governed by copyright laws and possibly other relevant legislation concerning contracts and intellectual property rights, rather than the Unfair Contract Terms Act 1977.

Question 10

The Unfair Contract Terms Act 1977 could be used to challenge a term in a contract for the sale of shares in a company?

Accepted Answer

The Unfair Contract Terms Act 1977 primarily applies to liability arising in contract, negligence, or other breaches of duty; it does not directly apply to the sale of shares in a company, as this falls under corporate or securities law rather than the types of contracts typically covered by the Act.

Question 11

The Unfair Contract Terms Act 1977 has been interpreted to ensure that in some circumstances, small businesses are treated as if they were consumers when buying goods?

Accepted Answer

The Unfair Contract Terms Act 1977 provides protection to both consumers and business customers against unfair contract terms. In some circumstances, small businesses may be treated as if they were consumers when buying goods under this act.

Question 12

A term restricting a right of 'set-off' has been held to be a form of exclusion clause?

Accepted Answer

A term restricting a right of 'set-off' allows a party to prevent the other party from deducting a debt owed to them from an amount owed by them, which can be seen as a form of exclusion of liability. Therefore, it can be considered an exclusion clause in a contract.

Question 13

The Unfair Contracts Terms Act 1977 ensures that consumers are protected to the same extent irrespective of whether they buy, rent or otherwise acquire goods?

Accepted Answer

The Unfair Contracts Terms Act 1977 applies to contracts for the sale or supply of goods, as well as contracts for hire or hire-purchase, and therefore protects consumers to the same extent regardless of whether they buy, rent, or otherwise acquire goods.

Question 14

Which case is often cited as evidence for the proposition that any party who signs a written contract is taken to have accepted any exclusion clauses in that contract? A) Scrutton v Midland Silicones B) L'Estange v Graucob C) Olley v Marlborough Court Hotel D) Parker v South Eastern Railway

Accepted Answer

The case of L'Estange v Graucob is often cited as evidence for the proposition that any party who signs a written contract is taken to have accepted any exclusion clauses in that contract, even if they did not read or understand them. In this case, the plaintiff signed a sales agreement for a cigarette vending machine without reading the terms and conditions, which included an exclusion clause. The court held that she was still bound by the exclusion clause as she had signed the contract.

Question 15

The statutory regime which controls exclusion clauses is contained in which Act?
A) The Law of Contract (Micellaneous Provisions Act) 1956
B) The Consumer Rights (Fair Dealing) Act 1996
C) The Unfair Contract Terms (1999)
D) The Unfair Contract Terms Act (1977)

Accepted Answer

The statutory regime which controls exclusion clauses is contained in the Unfair Contract Terms Act (1977).

Question 16

Could the UCTA test of reasonableness be said to produce uncertain and unpredictable results?

Accepted Answer

The answer of Could the UCTA test of reasonableness be...

Question 17

A customer is defined as a 'natural person' in which piece of legislation?
A) Unfair Contract Terms Act
B) Unfair Terms in Consumer Contracts Regulations
C) Sale of Goods Act
D) Consumer Protection Act

Accepted Answer

The Unfair Terms in Consumer Contracts Regulations 1999 define in Reg.4 a Consumer as a natural person who, in contracts covered by the Regulations is acting for purposes which are outside his trade, business or profession. Stone par 7.8.1

Question 18

What is meant by reasonableness in the Unfair Contract Terms Act?
A) That a reasonable person would enter into the contract
B) That a clause is reasonable in the circumstances of the case
C) That mentally ill people cannot sign contracts
D) That both parties need to be competent

Accepted Answer

Under section 11(1) of the Unfair Contract Terms Act 1977, in order to satisfy the 'requirement of reasonableness', the term must have been a fair and reasonable one to include in the contract, having regard to all the circumstances when the contract was made. Stone par 7.7.16

Question 19

What test is employed to test contractual terms under the UTCCR 1999?
A) Test of reasonableness
B) Test of acceptability
C) Test of unfairness
D) Test of unreasonableness

Accepted Answer

Under Regulation 5.1 of the Unfair Terms in Consumer Contracts Regulations 1999 a contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer. Stone par 7.8.2

Question 20

The UCTA 1977 has what effect on terms purporting to exclude the application of the implied terms in the Sale of Goods Act 1979 for consumers?
A) Makes them void
B) Subjects them to the test of reasonableness
C) Makes some void and subjects some to the test of reasonableness
D) Allows exclusions

Accepted Answer

The Unfair Contract Terms Act of 1977 contains specific provisions that make attempts to exclude the protection to consumers offered by certain sections of the Sale of Goods Act 1979 void. Stone par 7.7.10

Quiz 7: Clauses Excluding or Limiting Liability