End-of-chapter questions: Answer Guidance 10.2

Here the focus is on Sissy’s claim against Eric in the tort of negligence. Can Eric rely upon the limitation clause in the contract between Sissy and Rayburn Ltd? You might first consider the 1999 Act. S1(6) makes it clear that limitation clauses are covered, and then the crucial section here is s1(1)(b): what term purports to confer a benefit on Eric? Eric wants to rely upon Clause (b), but read by itself this does not purport to confer a benefit on Eric. However, perhaps clauses (a) and (b) can be read together; this is a question of interpretation (see Chapter 12). If the clauses are adjacent this is more likely than if they are separated by numerous other clauses and 50 pages in a very detailed contract. Section 1(2) and section 1(3) are unlikely to be problematic here.

Having considered the Act, you should then consider the common law (not least because of s 7(1) of the Act itself). This question calls for a comparison of Scruttons and The Eurymedon. Here it seems that it is expressly envisaged that third parties will perform the relevant services, so it seems likely that Eric would be able to rely upon the limitation clause at common law as well. Indeed, the Law Commission thought that the result of Scruttons and The Eurymedon would be the same under the Act.