Deck 14: The Control of Exclusion Clauses and Unfair Terms

Question 1

The court has power at common law to strike down unfair terms in a contract.

Answer 1

False

Question 2

The contra proferentem rule is not applied stringently to clauses which exclude liability altogether.

Answer 2

False

Question 3

Why is the fundamental breach rule defunct? Please select all that apply.

A) Major difficulties were faced in attempts to describe a 'fundamental' term.
B) The very nature of the doctrine of fundamental breach made it impossible to construct a rational theory, which undermined legal certainty.
C) It contradicts a basic principle of contract law; that it is for the parties, and not the court, to make the bargain.
D) It could be excluded where the contract is affirmed after a fundamental breach has been committed.

Answer 3

A,B,C

Question 4

Which of the following statements about the Unfair Contract Terms Act 1977 are correct? Please select all that apply.

A) The Act is concerned with all contract terms which may be thought to be 'unfair'.
B) The Act is not confined to contractual terms.
C) The Act applies to both consumer and non-consumer contracts.
D) Under the Act, terms are only considered unfair if they fail the statutory test of reasonableness.

Question 5

Which of the following factors might be taken into account in assessing whether an exclusion or limitation clause is unreasonable for the purposes of UCTA 1977?

A) The relative strengths of the parties' bargaining positions.
B) Whether one party received an inducement to agree to the term.
C) Whether it was reasonable at the time to expect that compliance with a condition which prevented the triggering of an exclusion or limitation clause.
D) Whether the party knew or ought reasonably to have known of the existence and extent of the term relied on by the other party.

Question 6

A clause purporting to exclude or restrict liability for misrepresentation may be subject to both UCTA 1977 and the Misrepresentation Act 1967.

Question 7

What has not changed under the Consumer Rights Act 2015?

A) The requirement of a significant imbalance in the parties' rights and obligations under the contract to the detriment of the consumer.
B) The requirement of good faith.
C) The test of unfairness is no longer limited to terms which have not been individually negotiated (standard terms)
D) A term may be excluded from an assessment of fairness only if it is transparent and prominent.
E) g. Director General of Fair Trading v First National Bank plc), requiring a 'significant' imbalance in the parties' rights and obligations under the contract.