Report No. 199

Legislation in United Kingdom:

The Canals and Railways Act of 1854 is said to be the first statute invalidating such clauses in a contract. Over the years, various other legislative controls were provided in the Hire Purchase Act, 1938. Wider control even of the exclusion and limitation of liability clauses, did not come until the 1970s. In 1962, the Final Report of the Committee on Consumer Protection (the Malony Committee) had recommended a prohibition on sellers in consumers contract "contracting out" of their implied obligations under the Sale of Goods Act, 1893 (SGA). In 1966 the matter was referred to the Law Commission, which in 1969 published the First Report, recommending number of changes to the Sale of Goods Act, 1893.

The recommendations were put into effect by the Supply of Goods (Implied Terms) Act 1973 (SOGITA), which prevented any seller from excluding or restricting liability. In consumer sales, sellers were prevented from excluding or restricting their liability under sections 13-15 of the SOGITA 1973 (merchantability, fitness for particular purpose and corresponding with description or sample): in other sales those liabilities could be excluded or restricted, but only to the extent that it could be shown to be fair and reasonable to allow reliance on the exclusion or restriction.

In 1975 Law Commissions published Exemption Clauses Second Report (Law Com. No.69; Scot Law Com. No. 39), which recommended wider controls over exclusion and limitation of liability clauses in contracts between businessmen and consumers, businessmen and businessmen and private contracts. This resulted in enactment of the Unfair Contract Terms Act 1977, (hereinafter called UCTA) which incorporated in slightly modified form, the controls in SOGITA. In 1999 came the Unfair Terms in Consumer Contracts Regulations, 1999 (UTCCR) and applied to terms that exclude or restrict obligations or liabilities.