9084 · 3.2.4
Control of exemption clauses — FAQ
Frequently asked questions for 9084 Control of exemption clauses. Direct answers first, then deeper explanation — then practise with marking.
If I sign a contract, does that mean all its exemption clauses are automatically valid?
No. Signing a contract means the terms are incorporated (L'Estrange v Graucob), but this is only the first step. The clause must still be interpreted by the courts (construction) and, most importantly, it must comply with statutory controls. If it is a B2B contract, the clause must satisfy the requirements of UCTA 1977, such as the reasonableness test. If it is a B2C contract, it must pass the fairness test under the CRA 2015.
Is the 'reasonableness' test under UCTA 1977 the same as the 'fairness' test under the CRA 2015?
No, they are distinct tests. The UCTA 'reasonableness' test focuses on whether the term was fair to include at the time the contract was made, considering factors like bargaining power. The CRA 'fairness' test is broader, asking if the term causes a 'significant imbalance' in rights, contrary to 'good faith'. The fairness test is generally seen as more protective of the consumer than the reasonableness test is for a business.
Can a business ever exclude liability for a breach of contract?
Yes, but it is heavily controlled. In a B2B contract, a clause excluding liability for breach is subject to the UCTA reasonableness test. In a B2C contract, such a clause is subject to the CRA fairness test and is very likely to be found unfair if it denies the consumer a proper remedy. Crucially, liability for certain things cannot be excluded at all, such as for death or personal injury caused by negligence (under both Acts) or for goods not being of satisfactory quality in a consumer contract (under the CRA).