U – Unfair terms
10/11/23
LAST BUS LTD v DAWSONGROUP BUS AND COACH LTD [2023] EWCA Civ 1297
The court reviewed principles applicable to determine whether an exclusion clause in a standard form contract satisfies the test of reasonableness in the Unfair Contract Terms Act 1977. The judge below had been wrong to determine on a summary basis that the test was satisfied. Such a fact-sensitive issue would ordinarily require a trial.
2/10/19
NATIXIS SA v MAREX FINANCIAL [2019] EWHC 2549 (Comm)
The claimant succeeded in a claim for damages for the defendant’s breach of contract in providing forged warehouse receipts in connection with repo transactions for the purchase of nickel. The court considered principles of common mistake [181], bailment [227], collateral contracts [251], estoppel [280], negligence [289], the impact of disclaimers [353], contributory negligence [445], the court’s approach to clauses negativing duties and liabilities [481], the reasonableness test under the Unfair Contract Terms Act 1977 [513] and mitigation [538].
25/5/17
PERSIMMON HOMES LTD v OVE ARUP & PARTNERS LTD [2017] EWCA Civ 373
A clause excluding "liability for any claim in relation to asbestos" was wide enough to cover liability arising from negligence. The contra proferentem rule has limited relevance to commercial contracts negotiated between parties of equal bargaining power and should only be used if there is genuine ambiguity as to meaning [52]. In commercial contracts the three-stage test for interpreting exclusion clauses suggested in the Canada Steamship case is more relevant to indemnity clauses than to exclusion clauses [56].
22/5/17
CASEHUB LIMITED v WOLF COLA LIMITED [2017] EWHC 1169 (Ch)
Considers principles to be applied to determine whether an assignment is ineffective on grounds of maintenance or champerty. The claimant took assignments of small consumer claims to recover cancellation fees on grounds that the cancellation provisions were unfair contrary to s 62 Consumer Rights Act 2017. The assignment were effective as the claimant had acquired the right to the sums in question, and the assignment of the claim to recover those sums was incidental to that right, not a bare cause of action. But the cancellation fees formed part of the price payable under the contracts (OFT v Abbey National, 2009) so s 64(1)(b) Consumer Rights Act 2017 prevented the claimant from challenging them under s 62.
7/12/15
PERSIMMON HOMES LTD v OVE ARUP & PARTNERS LTD [2015] EWHC 3753 (TCC)
Limitation and exclusion clauses protected an engineering consultant from liability to a developer for professional negligence in relation to claims relating to asbestos but did not extend to claims under earlier appointments.
27/11/15
THORNBRIDGE LTD v BARCLAYS BANK PLC [2015] EWHC 3430 (QB)
A claim for damages for mis-selling an interest rate hedge was dismissed. Considers when a bank assumes an advisory relationship [25]. On the facts the bank had given information not advice. A letter stating that the bank may from time to time provide advice did not amount to notification that it was advising. Even if advice was given, the bank assumed no advisory duty. The fact that the bank’s representative was said to be a Corporate Risk Adviser was not of significance. Disclaimers in the bank’s documentation prevented any advisory duty arising, were not exclusion clauses and were in any event not unreasonable contrary to UCTA. Any other duty was limited to ensuring that information given was not misleading [118]. Reference in the bank’s terms of business to the agreement being subject to FSA Rules did not incorporate those rules into the terms. Nor on the facts could the bank be criticised for failing to give more information about break costs. The swap did what it was supposed to do and had not been unsuitable. The court was not satisfied that a cap would have been taken even if it had been offered so the case also failed for lack of causation.
1/10/15
Substantive provisions of the CRA 2015 come into force. The Act consolidates and amends remedies for defective goods, introduces new remedies for digital content and reforms the law on unfair terms in consumer contracts.
3/9/15
COSTEA v SC VOLKSBANK ROMANIA SA [2015] EUECJ C-110/14
For the purpose of Council Directive 93/113/EEC on Unfair Contract Terms, a lawyer who entered into a credit agreement could be a consumer if the agreement was not entered into for the purpose of his profession. This was so even if security was taken over an asset of his law firm.
26/2/15
MATEI v SC VOLKSBANK ROMANIA SA [2015] EUECJ C-143/13
It is for a national court to decide whether a provision of a consumer loan agreement imposing a particular charge and a provision allowing the creditor to vary the interest rate are part of the main subject matter and not therefore subject to unfair contract terms regulation. Considers principles to be applied and gives indications that such terms are not excluded from consideration as part of the main subject-matter of the contract. Stresses that terms which form part of the main subject-matter are subject to assessment of fairness if not drafted in clear and intelligible language. This requires setting out the reasons for varying the interest rate so that the consumer can foresee on the basis of clear intelligible criteria the economic consequences.
18/2/15
BARCLAYS BANK PLC v GRANT THORNTON UK LLP [2015] EWHC 320 (Comm)
A company’s auditors owed no duty of care to a bank in relation to two reports which the auditors prepared and which contained disclaimers stating that no responsibility was accepted to anyone other than the company and its directors. The disclaimers were not unreasonable contrary to the Unfair Contract Terms Act 1977.
26/9/14
CRESTSIGN LTD v NATIONAL WESTMINSTER BANK PLC [2014] EWHC 3043 (Ch)
On the facts the bank had given advice, not merely information, to the claimant about interest rate swaps, and that advice had steered the claimant to taking a fixed interest rate swap. The relationship between the parties also satisfied the requirements of Hedley Byrne v Heller for a duty of care to arise. But the bank had successfully disclaimed responsibility for its advice in contract documents drawn to the claimant’s attention before the swap was concluded so the claim failed. The bank’s terms of business contemplated the bank giving advice if this was specifically agreed, but for such an agreement to arise there had to be something more than merely the giving of advice. The clauses on which the bank relied were not exclusion clauses, rather they defined the basis on which the bank was acting. Had they been exclusion clauses they would have been unreasonable contrary to UCTA 1977, especially because expert advice had not been readily available to the claimant. Had the bank not disclaimed responsibility, it would also have been held in breach of duty by recommending an unsuitable product especially because the swap had been for 10 years but the loan had a 5 year term and high break costs were payable to terminate the swap early. A cap should have been considered. Although the bank had a duty to ensure that the explanation it gave was not misleading that duty only required the bank to explain the products it was willing to sell, not other products. The bank had discharged its limited duty in that respect.
27/3/14
WEST v IAN FINLAY & ASSOCIATES [2014] EWCA Civ 316
Considers the application of the Unfair Terms in Consumer Contracts Regs 1999 to an exclusion clause in a construction contract effectively limiting a contractor’s liability for loss for which it was responsible with others to the level of contribution which would be payable under the Civil Liability (Contribution) Act 1978 (regardless of the insolvency of the others who were liable). On the facts the clause was fair. It also satisfied the requirement of reasonableness in the Unfair Contract Terms Act 1977. The court also considered the correct approach to the award of interest [75] and the level of awards of damages for distress and inconvenience [84]. On the facts interest at 4.5% pa over base was appropriate and damages for distress were reduced to reflect the guidance in AXA Insurance UK Plc v Cunningham Lindsay UK (2007).
21/3/14
FUJITSU SERVICES LTD v IBM UNITED KINGDOM LTD [2014] EWHC 752 (TCC)
Contains a useful analysis of the principles of contractual construction when considering exclusion clauses and the circumstances in which contracting parties may assume fiduciary duties. On the facts a clause excluding the liability of a main contractor to a sub-contractor for loss of profits was effective, there was no fiduciary relationship between the parties and no duty of good faith was owed.
ELVANITE FULL CIRCLE LTD v AMEC EARTH & ENVIRONMENTAL (UK) LTD [2013] EWHC 1191 (TCC)
On the facts the defendant had not committed any breach of contract. But even if it had done so, clauses capping liability, excluding indirect loss and requiring claims to be brought within a year were not unreasonable contrary to the Unfair Contract Terms Act 1977 [284].
25/3/13
DEUTSCHE BANK (SUISSE) SA v KHAN [2013] EWHC 482 (Comm)
A bank had acted reasonably in rejecting a valuation of security as unsatisfactory in view of the hope value included which was uncertain and speculative. A satisfactory valuation was a condition precedent to the obligation to make facilities available, so the bank had been entitled not to make advances on the terms of the facility and to make partial advances on different terms. Claims against the bank of misrepresentation and mistake failed on the facts. The bank had not known of any mistake by the defendants, had not given any warranty as to returns available from investment products sold with the facility, and had not failed to advise of the adverse consequences of selling the products prior to maturity. Set-off of counterclaims was excluded by the facility agreement and such claims could not be a defence to the bank’s claim for possession of security. The exclusion of set-off was not unreasonable contrary to the Unfair Contract Terms Act 1977 nor did it, or a provision for payment of default interest, cause the relationship between the parties to be unfair within s 140A Consumer Credit Act 1974. The agreed terms did not create a significant imbalance within the Unfair Terms in Consumer Contracts Regs 1999.
11/3/13
A J BUILDING & PLASTERING LTD v TURNER [2013] EWHC 484 (QB)
Regulation 7(2) of the Unfair Terms in Consumer Contracts Regulations 1999 (which requires doubt as to the meaning of written contract terms to be resolved by preferring the interpretation most favourable to the consumer) applies to all terms of a consumer contract, not just those challenged as unfair. In effect it applies the contra proferentem principle and like that principle is to be applied as a last resort if no firm conclusion can be reached as to the meaning of the term.
7/2/13
KUDOS CATERING (UK) LTD v MANCHESTER CENTRAL CONVENTION COMPLEX LTD [2013] EWCA Civ 38
The defendant had wrongly purported to terminate a contract under which it appointed the claimant as its exclusive supplier of catering services for 5 years. The claimant had been entitled to treat the defendant's conduct as a repudiation of the contract and to claim loss of profits for the remaining period of the contract. On its correct interpretation, a clause excluding liability for the supplier's loss of profits did not apply to losses suffered from a refusal of the defendant to perform. If the clause had applied there would have been no sanction for the breach and there is a presumption that parties do not lightly intend to abandon contractual remedies.
5/9/12
FG WILSON (ENGINEERING) LTD v JOHN HOLT & CO (LIVERPOOL) LTD [2012] EWHC 2477 (Comm)
A no set-off clause in a seller's standard terms was reasonable and not unfair under UCTA 1977.
31/7/12
PARKER v THE NATIONAL FARMERS UNION MUTUAL INSURANCE SOCIETY LTD [2012] EWHC 2156 (Comm)
A term in an insurance policy requiring the insured to provide all written details and documents on request was not unfair under UTCCR 1999 so rejection of the claim on that basis was not unreasonable.
2/4/12
AMPLEFORTH ABBET TRUST v TURNER & TOWNSEND PROJECT MANAGEMENT LTD [2012] EWHC 2137 (TCC)
A term restricting the liability of project manager to the level of his fees was unreasonable having regard to the fact that the project manager was required to take out professional indemnity insurance cover of £10m.
2/3/12
OVERY v PAYPAL (EUROPE) LTD [2012] EWHC 2659 (QB)
The claimant had not contracted as a consumer when entering into a user agreement for a Paypal account because he had wanted the account for his photography business as well as to collect money paid by third parties to participate in a competition for the sale of his house. He could not therefore rely on the Unfair Terms in Consumer Contracts Regs 1999 to challenge terms of the user agreement as unfair. Terms excluding liability on the part of Paypal for loss of profits, indirect and consequential losses were subject to the Unfair Contract Terms Act 1977 but satisfied the requirement of reasonableness. A term limiting any damages to the fees paid in the prior 12 months or to the value of the transaction giving rise to the dispute was unreasonable and unenforceable under the 1977 Act.
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