Cardiff Legal

Here is a case excerpt from Law​teacher​.net regard­ing a com­mer­cial dis­pute about Unfair Con­tract Terms:

Peter Sym­mons & Co v Cook (1981)

The Claimant firm of sur­vey­ors bought a second-​hand Rolls Royce from the defend­ants which developed ser­i­ous defects after 2,000 miles. It was held that the plaintiff acted as a ‘Con­sumer’ in pur­chas­ing the vehicle and that to be treated as a com­mer­cial trans­ac­tion, “the buy­ing of cars must form at the very least an integ­ral part of the buyer’s busi­ness or a neces­sary incid­ental thereto”. The judge­ment emphas­ised that only in these cir­cum­stances will a buyer and seller be per­ceived as equal in their bar­gain­ing strength and there­fore sub­ject to the terms of a com­mer­cial con­tract, no mat­ter how oner­ous they appear to be.

In this case, the seller sought to avoid liab­il­ity to the buyer through use of an ‘Exclu­sion Clause’. The buyer did not pur­chase the vehicle in the nor­mal course of their busi­ness and so relied on the Unfair Con­tract Terms Act 1977 in arguing that this clause was unfair.

This is par­tic­u­larly rel­ev­ant to con­tracts where one party seeks to get the other to agree to their stand­ard terms of busi­ness, and where such terms may be oner­ous or restrict­ive. In the event of a dis­pute, such terms can be chal­lenged if they cre­ate a sig­ni­fic­ant imbal­ance between the con­tract­ing parties — usu­ally in favour of the party who sought to enforce the terms.

The case also demon­strates that even seem­ingly Com­mer­cial con­tracts are not com­pletely exempt from the pro­vi­sions of the Unfair Con­tract Terms Act. Busi­nesses should review their terms and con­di­tions to ensure that they are not poten­tially unfair, or reli­ance on such terms may turn out to be a costly error.

Cardiff Legal