Building Law Monthly

Exclusion clauses: Determining reasonableness

In Last Bus Ltd (t/a Dublin Coach) v Dawson Group Bus and Coach Ltd [2023] EWCA Civ 1297 the Court of Appeal established three points of importance when seeking to determine whether an exclusion or limitation clause passes the reasonableness test to be found in the Unfair Contract Terms Act 1977. First, given the fact-sensitive nature of the inquiry, it is unlikely that the reasonableness of a clause can be determined on a summary basis. It is much more likely that it will be established at the trial of the action or possibly as a preliminary issue. Second, when considering the equality of bargaining power of the parties, it is important to have regard to the equality of bargaining power in relation to the terms of the contract and not simply the price of the goods or services. Finally, it is unlikely to be reasonable for a provider of finance to seek to exclude liability entirely in respect of the goods that are supplied under the hire-purchase or equivalent agreement and this is so notwithstanding the fact that the provider of finance may have no knowledge or expertise in relation to the goods that are being supplied to the ultimate customer.

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