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UCTA 1977 is another layer of legislative protection that controls attempts to restrict liability for breach of contract and negligence of contract terms regulated by English law. However, the exclusion law can be slaved to the Act and come into force in case the terms can meet the statutory requirement of reasonableness. The purpose of the application of UCTA to UK companies is rather narrowed, especially if UK company is planning to cooperate with non-UK businesses on a UCTA contractual basis. In particular, Presto Water ltd supplies about 350 million liters of water to more than 2 million customers in England and overseas. This business is regulated under the Unfair Contract Terms 1977 that places several limitations both on the sellers and on the buyers.
Analyzing the contract terms, some of them turn out to be ineffective due to many reasons. This is especially connected with excluding clauses that limit the liabilities for death or personal injury resulting form negligence . Then, liability may be restricted in case the terms meet the requirement of reasonableness predetermined by different conditions (circumstances and resources), which are more beneficial for customers rather than for sellers. The final term for neglecting liability is based on voluntary acceptance of any risk which is rarely practiced when concluding contracts. Therefore, this term turns out to be ineffective for both parties and the sellers in particular.
That Presto Water can suffer losses when dealing with unreasonable indemnity clauses . First of all, those clauses are not beneficial for consumers as they cannot guarantee the seller being liable for the terms if are infringed due to their reasonableness. The problem is even more complicated for the company, as it cannot ensure the consumers that the product will be delivered properly due to circumstances. For example, if the company exports the production lot to another country, it can also be protected by the reasonableness test issue assuming that the insurance is narrowed to the contingencies that occurred.
However, the Unfair Contract Terms Act seeks methods for restricting the companys liability thus protecting it from unnecessary losses. These terms seem to be fair and beneficial for the sellers and fair and non-beneficial for the customers. Those terms are delivered by section 11(1) of UCTA 1977 stipulating that the requirement of reasonableness &shall have been a fair and reasonable one to be included having regard to the circumstances which were, or ought to have been known to or in the contemplation of the parties when the contract was made .
As the company deals with commodities consumed by the customers, such clause as guarantee of commodity goods will be the best way out for the company for their production to be always in high demand. This is one of the provisions that force the company to take responsibility for the damage or loss of the goods. Therefore, the provision completely responds to the reasonable terms.
The issue is also beneficial for Presto Water, as protects the company from abuse of the consumers rights. On condition that goods are to be regarded as in consumer use when a person is using them or has them in his possession for use&and anything in writing is a guarantee if it contains or purports to contain some promise or assurance&will be made good by complete or partial replacement . Closer consideration shows that the provision also protects the companys rights, as its liability is narrowed to some writing affirmations if any. On the whole, the company regulated by this act has numerous benefits.
Reference List
Chen-Wishart, M. 2007. Contract Law. US: Oxford University Press.
Hanson, S., 2003. Legal method & reasoning. New York: Routledge Cavendish.
Koffman, L., and Macdonald E., 2007.The Law of Contract. UK: Oxford University Press.
Maclntyre, E. 2008. Business Law. US: Pearson Education.
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