Legal Corner
by Owen Hill, Consultant Solicitor of Hooper & Wollen Solicitors
Are businesses still shooting themselves in the foot?
Most businesses generally seek to adopt a
fair and measured approach to dealing with customers because of the relatively modern mantra that it is widely regarded as good for business – but this was not always the case.
Until 1977 and some legislation called the Unfair Contract Terms Act – it was generally accepted that a business could exclude legal liability for just about anything if it had the right contract terms and conditions or put up the right signs or notices. The liability for personal injury to a customer could depend upon whether the casualty had actually noticed and read the danger sign before falling flat on their face. Some businesses would employ such outrageous contract terms (often tucked away in small print) that they would argue that they had no liability if it had supplied rotten apples when it was supposed to deliver fresh oranges.
The Unfair Contract Terms Act changed all this.
Any contract terms (including signs and notices) that purport to exclude or limit legal liability for personal injury are now void. Every private individual or business has a duty to take reasonable care to avoid causing personal injury to others. Signs and notices
can help by providing warnings or advice and can go some way towards performing the duty to take care to avoid risk of injury. The bright yellow cones that often
appear in abundance whenever there is a hint of a damp and potentially slippery surface on supermarket floors are a good example.
Any contract terms (including signs and notices) that purport to exclude or limit legal liability of a business in relation to a consumer are now void – unless the extent and nature of the exclusions or limitations are regarded as reasonable. This applies to all cases of legal liability except personal injury as mentioned above – where liability can never be reduced or limited
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www.hooperwollen.co.uk This firm is regulated by the Solicitors Regulatory Authority (No 49922) Paignton 01803 521692
Businesses now have to manage potential liabilities by making sure that the contract terms and conditions (including signs and notices) are regarded as reasonable. Getting this right is really important because if a business over steps the mark and seeks to impose terms and conditions that are determined to be unreasonable – then the effort is void and the business is afforded no protection at all. If the right balance is achieved and the effort to define liability is regarded as reasonable – then the terms apply and protection is achieved
There is no definition of
reasonableness in the legislation but most regard the meaning as obvious. Hands up who thinks it is fair for the manufacturer of a modern flat screen TV to suggest that the product warranty is valid for one year only? Thought so.
Perhaps the tough terms you read (or wrote) in a contract recently have no effect at all ?
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