End-of-chapter questions: Answer Guidance 15.1

This problem question concerns limitation clauses. The first issue is whether the clause is incorporated into the contract (see too Chapter 11). Assuming that the clause is part of the contract, and is interpreted such that it covers these claims, you then need to consider the effect of statute.

As regards the office party, Jermaine will seek to rely upon UCTA 1977 section 6 or section 3. This will lead to an assessment of reasonableness. The relative bargaining position of the parties is always relevant, and here it might be that Bret can try to justify the limitation clause as relating to the contract price, distinguishing St Alban’s City and District Council v International Computers Ltd [1996] 4 All ER 481. If the limitation clause is unreasonable, it may be that some of Jermaine’s loss (eg the loss of a chance of future work) is too remote to be recoverable (see Chapter 26).

As regards the birthday party, it is interesting to consider whether Jermaine is a consumer or not. Section 2(3) of the CRA 2015 defines consumer as “an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession”. It is perhaps not entirely clear whether the 2015 applies here. If it does, provisions such as section 31 need to be considered. If Jermaine is not a consumer, then UCTA 1977 applies and a similar analysis to that considered above would be used. It is not clear if Bret has been negligent; if he has, then either UCTA 1977 section 2, or CRA 2015 section 65 might be invoked. As for recoverable losses, there will again be an issue of remoteness (see Chapter 26).