ICAEW BL · Chapter 3 · Question 6 of 10
In a contract between two businesses, a supplier's standard terms exclude 'all liability for negligence, howsoever caused'. Under the Unfair Contract Terms Act 1977, how will the clause be treated?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) It is void in so far as it excludes liability for death or personal injury caused by negligence, and valid for other loss or damage only if reasonable
Explanation
Under UCTA 1977 s2(1), a person cannot exclude or restrict liability for death or personal injury resulting from negligence, whatever the circumstances. Under s2(2), exclusion of liability for other loss or damage caused by negligence is effective only if it satisfies the reasonableness test. Being in a business-to-business contract does not take the clause outside the Act.
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