Exclusion clauses
Exclusion clauses

Start this free course now. Just create an account and sign in. Enrol and complete the course for a free statement of participation or digital badge if available.

Free course

Exclusion clauses

5 The Unfair Contract Terms Act 1977 (UCTA 1977)

The introduction to UCTA 1977 states that it is:

An Act to impose further limits on the extent to which under the law of England and Wales and Northern Ireland civil liability for breach of contract, or for negligence or other breach of duty, can be avoided by means of contract terms and otherwise, and under the law of Scotland civil liability can be avoided by means of contract terms.

As a result of the amendments set out in Schedule 4 of CRA 2015, its provisions only apply to business-to-business contracts. Parts 1 and 3 of UCTA 1977 apply to England and Wales. Schedule 1 sets out a number of types of contracts that the key sections in part 1 do not apply to. These include (among others) insurance contracts, contracts relating to interests in land and contracts relating to intellectual property (such as patents and trademarks).

The key sections in relation to exclusion clauses in business-to-business contracts are ss2–7. In these, the term ‘liability’ is defined as ‘business liability’ (other than in s6 of UCTA 1977, as discussed later).

Box 6 What is ‘business liability’?

Business liability is defined in s1 (3) of UCTA 1977 as:

… liability for breach of obligations or duties arising –

  • a.from things done or to be done by a person in the course of a business (whether his own business or another’s); or
  • b.from the occupation of premises used for business purposes of the occupier.

Section 14 states that the term ‘business’ includes professions and the activities of any government department, or local or public authority.

In other words, UCTA 1977 deals with situations where a business is contracting with another business. It does not apply where two non-businesses are entering into a contract.


Take your learning further

Making the decision to study can be a big step, which is why you'll want a trusted University. The Open University has 50 years’ experience delivering flexible learning and 170,000 students are studying with us right now. Take a look at all Open University courses.

If you are new to University-level study, we offer two introductory routes to our qualifications. You could either choose to start with an Access module, or a module which allows you to count your previous learning towards an Open University qualification. Read our guide on Where to take your learning next for more information.

Not ready for formal University study? Then browse over 1000 free courses on OpenLearn and sign up to our newsletter to hear about new free courses as they are released.

Every year, thousands of students decide to study with The Open University. With over 120 qualifications, we’ve got the right course for you.

Request an Open University prospectus371