Scottish Law Commission (Reports)

 


PART 2

AN OVERVIEW OF OUR RECOMMENDATIONS

2.1      In this Part we provide an overview of our recommendations. Detailed consideration of the issues is to be found in the Parts that follow.

A UNIFIED REGIME FOR CONSUMERS (PART 3)

Background

2.2      For consumer contracts, the key objective of our project was to design a single, unified legislative regime that preserved the consumer protections currently afforded by both UCTA and the UTCCR.

2.3      In developing our recommendations we were aware of the constraints imposed on us by the UK's obligation to implement the Directive in full. Equally, as we stated in the Consultation Paper,^[1] we were keen that consumers should not be deprived of any of the protections afforded by UCTA.^[2]

2.4      At present, unfair terms in consumer contracts are governed by both UCTA and the UTCCR.^[3] The existence of this dual regime has caused considerable confusion and uncertainty because:

(1) the statutory controls over unfair terms are split between two pieces of legislation and must be located in each text;

(2) the UTCCR and UCTA contain inconsistent and overlapping provisions;

(3) the scope of application of each piece of legislation is different;

(4) UCTA and the UTCCR use different language and terminology;

(5) UCTA is drafted in a very dense and highly technical style; and

(6) the UTCCR are a fairly literal version of the text of the Directive whose language and, in some instances, concepts are not always easily understood by UK lawyers.

The principal differences between UCTA and the UTCCR

2.5      The differences between UCTA and the UTCCR are multiple and were discussed in some detail in the Consultation Paper.^[4] A summary of the respective schemes will make the principal differences apparent.

2.6      UCTA:

(1) applies only to exclusion and limitation of liability clauses and indemnity clauses;

(2) makes certain exclusions or restrictions of no effect at all;

(3) subjects others to a reasonableness test;

(4) contains guidelines for the application of the reasonableness test;

(5) puts the burden of proving that a term within its scope is reasonable on the party seeking to rely on the clause;

(6) often applies whether the terms were negotiated or were in a "standard form";

(7) does not apply to certain types of contract even when they are consumer contracts;

(8) has effect only between the immediate parties;

(9) has separate provisions for Scotland; and

(10) applies to terms and notices excluding certain liabilities in tort [delict^[5]].

UCTA also applies to contracts between businesses and certain "private" contracts for the sale of goods where neither of the two parties is a business.

2.7      In contrast, the UTCCR:

(1) apply to any kind of term other than the definition of the main subject matter of the contract and the adequacy of the price;

(2) do not make any particular type of term of no effect at all;

(3) subject the terms to a fairness test;

(4) do not contain detailed guidelines as to how that test should be applied, but contain a so-called "grey" list of terms which "may be regarded" as unfair;

(5) leave the burden of establishing that the clause is unfair on the consumer;

(6) apply only to "non-negotiated" terms;

(7) apply to consumer contracts of all kinds;

(8) are not only effective between the parties but empower various bodies to take action to prevent the use of unfair terms; and

(9) apply to the UK as a whole.

They do not apply to business or private contracts.

Our consultation proposals

2.8      The most important of our provisional proposals for creating a unified regime of controls over consumer contracts were as follows:

(1) there should be unified legislation for the whole of the UK;

(2) (with some minor exceptions) there should be no reduction of consumer protection;

(3) those terms that are of no effect under UCTA should remain of no effect;

(4) other terms (including terms that were individually negotiated) should be required to satisfy a "fair and reasonable" test;

(5) as far as possible, the new regime should be clearer and more accessible to the reader; and

(6) where possible, important requirements of the unfair terms legislation that are not immediately obvious from the existing legislation should be made explicit. In particular, the exemptions for the main definition of the subject matter of the contract and for the "adequacy of the price" should be clarified. The new legislation should also emphasise the vital importance, in determining whether a term is fair, of plain intelligible language and transparency in general.

The response to our Consultation Paper

2.9      Overall the responses to our consultation proposals on consumer contracts were positive. We asked consultees to comment generally on the practical and economic impact that our proposals would have for consumers and businesses. Of the responses we received, just under half were wholly positive. A similar number thought that our proposals would bring benefits, particularly to consumers, but expressed some concern about possible increased costs for businesses. Only a handful made no positive comment.

Our recommendations

2.10      The Commissions' policy for consumer contracts remains very similar to that set out in the Consultation Paper.^[6] In broad terms, we recommend legislating to allow a consumer to challenge any kind of term that is not a "core" term, whether or not the term was negotiated. The details of these recommendations are discussed in Part 3. Here we mention two points on which the Consultation Paper did not make firm proposals but rather specifically invited views.

2.11      The discussion that follows refers to various sections in UCTA. Where the relevant sections differ between England and Scotland, we give the English version first, followed by the Scottish provision in square brackets.

The burden of showing that a term is fair and reasonable

2.12      In the Consultation Paper we invited views about where the burden of showing that a term is reasonable should fall in a case involving an individual consumer (as opposed to a case brought by a qualifying body under the preventive powers).^[7] The draft clauses included in the Consultation Paper (referred to below as the "Consultation Draft") offered alternative drafts to show different possibilities.^[8] The first followed UCTA (section 11(5) [section 24(4)]), rather than the UTCCR,^[9] in providing that it is for the party claiming that a term is fair and reasonable to prove that it is the case.^[10] The second made the burden differ according to whether or not the term was contained in our replacement for the Indicative List.^[11] If the term was on the list, the burden would fall on the party claiming that it was fair and reasonable; if it did not, the burden would be placed on the party claiming that a term was not fair and reasonable.^[12] Consultees were evenly divided as to which version they preferred. When we considered the issue in greater depth, it became clear that the second approach was unsuitable for two reasons. First, allowing the inclusion of a term on the Indicative List to reverse the burden of proof would be circular, since some terms are on the list only if they are disproportionate or unreasonable. Second, we were persuaded that a business is almost always in a stronger position than a consumer when contracting. It was therefore agreed that the business should bear the burden in all cases involving individual consumers.

2.13      There was some concern that a business should not have to justify every term of the contract without the issue having been raised by the consumer in relation to a specific term. To address this concern, the final Draft Bill provides that the business only has to prove that the term or notice was fair and reasonable once the issue has been raised.^[13]

Employment contracts

2.14      In the Consultation Paper we noted not only that some courts have treated the employee as a consumer but also that employment contracts share some features with business contracts.^[14] We asked whether employment contracts should be included in our regime as business contracts, consumer contracts or in a category of their own. Over the course of the project we consulted a number of specialists in the field of employment law. We were persuaded that there are already sufficient controls over employment contracts in general. There is therefore no need to extend to employees the proposed consumer protections. However, it is important that exclusions and limitations of liability in written standard terms of employment should be subject to controls. Following that consultation process, we decided to treat employment contracts as a separate category. The practical effect of our recommendations is that where the employment is on the employer's standard terms, a term that purports to exclude or restrict the employer's liability or to allow the employer to render a performance substantially different from that reasonably expected will be subject to the "fair and reasonable" test.^[15]

Choice of law and international contracts

2.15      UCTA has three provisions dealing with international contracts and choice of law issues: sections 26, 27(1) and 27(2). The UTCCR have one provision which is closely based on Article 6(2) of the Directive. Regulation 9 provides that the UTCCR shall apply notwithstanding any term that applies the law of a non-Member State provided the contract has a close connection with the territory of the Member States.

2.16      We took a close look at these provisions to see whether they should be replicated or substituted in the new legislation. The question whether and how to replace section 27(2), which provides rules to prevent evasion of UCTA's controls by means of a choice of foreign law, gave rise to some difficulty in relation to consumer contracts.

2.17      In the Consultation Paper, we suggested that it would be possible to rely on the independent operation of certain provisions of the Rome Convention. We thought they would ensure the application of our consumer protections in all the situations contemplated by Article 6(2) of the Directive, irrespective of the choice of law of a non-Member State. But we eventually decided that the Rome Convention would not achieve this objective independently. Instead it would be necessary to include express provisions in the new legislation nullifying attempts to evade its consumer protections by means of a choice of foreign law.

2.18      We looked at the possibility of incorporating provisions replicating Article 6(2) of the Directive, with any necessary modifications. However, UK law gives consumers stronger protection than is required by the Directive which they would not necessarily have under the law of another Member State. We were persuaded that a clause enforcing UK mandatory provisions in a wide range of circumstances would afford broader protection to UK consumers than a clause replicating the exact wording of Article 6(2) (as Regulation 9 of the UTCCR does). This is because a choice of another Member State's law might give UK consumers less protection than they would enjoy under UK law, but the wording of Article 6(2) would not operate to apply the more favourable protection of UK law to that contract. We therefore recommend that the Draft Bill's mandatory provisions should apply whenever the consumer is living in the UK and takes the necessary steps to conclude the contract there.

2.19      We considered drafting a provision that would apply the protective regime of the new legislation to all contracts that could be said to have a close connection to the territory of the Member States. Nevertheless, we decided against this course on the grounds that it would be inappropriate to apply UK law to contracts with a more substantial connection to another Member State. In these circumstances the other State's own Directive-compliant regime would normally apply to protect the consumer by virtue of the existing rules of private international law. Therefore, in cases not covered by our core choice of law provisions for UK consumers, we recommend that the law of another Member State should apply if it would do so in the course of the application of the ordinary rules of private international law.

2.20      In any remaining cases closely connected to the Member States as a whole, we recommend that the new legislation should apply by default so as to comply with the requirements of the Directive. We also consider that the Draft Bill should expressly include a presumption that contracts for goods and services exported to territories outside the Member States should not be regarded as closely connected to the Member States.

2.21      We did not experience the same problems in deciding whether or not to reproduce the effect of UCTA section 26 for consumer contracts. Section 26 exempts cross-border contracts for the sale or supply of goods. There is no similar exemption in the Directive or in the UTCCR. Accordingly, if it is to comply with the Directive, the new legislation cannot have a blanket exemption for international contracts. Therefore we recommend that the effect of section 26 on consumer contracts is not reproduced in the new legislation.

2.22      A secondary effect of this approach will be to implement fully the SCGD for the first time. The SCGD provides no exemption for international contracts. However, the SSGCR implementing the SCGD leave exclusions of the seller's obligations to be regulated by UCTA, without apparently noticing that UCTA does not apply to international sales contracts.

PRESERVING THE EFFECT OF UCTA IN BUSINESS CONTRACTS (PART 4)

Background

2.23      We were asked to consider whether UCTA provided sufficient protection for business contracts. Because UCTA only addresses exclusions and limitations of liability, the primary concern was that other unfair terms escape review. The scope of clauses excluding or limiting liability is widely conceived in UCTA, so that, for example a business which deals on the other party's standard terms can challenge a term apparently allowing that party to render a contractual performance substantially different from that which was reasonably expected.^[16] However, this does not permit the business to challenge unfair standard terms which relate to its own performance or obligations.

Our proposals

2.24      In the Consultation Paper, we provisionally proposed that the protection against unfair terms in contracts between businesses should be extended to include most of the protections afforded to consumer contracts under the UTCCR. During consultation, we became aware that this proposal was highly controversial. This was principally because of the uncertainty that might result from a wider range of terms in business contracts being subject to review, even if such terms would seldom be held to be unreasonable. Consultees have persuaded us to alter our views. The Commissions do not recommend such expanded protection for businesses in general. However, we do recommend expanded protection for small businesses.

Our recommendations

2.25      The broad policy of our recommendations for business contracts in general is to preserve the effect of UCTA.

2.26      We recommend a measure of deregulation in respect of the existing law by removing some of the controls that UCTA presently imposes over exclusions and limitations of liability for breach of terms implied by statute. The relevant sections are UCTA section 6(3) [section 20(2)(ii)] and section 7(3) [section 21(3)]. They relate to four terms implied by the Sale of Goods Act 1979 and associated legislation.^[17] Briefly, these implied terms require that goods should conform to description or sample and should be of satisfactory quality and fit for the buyer's purpose. UCTA states that in business contracts any term (whether standard or negotiated) which attempts to restrict any of these four implied terms is subject to the reasonableness test. In the Consultation Paper we thought that the controls should only apply to non-negotiated terms as it would be very rare for a negotiated exclusion clause to be considered unfair.^[18] The majority of consultees who examined this question supported our argument. This is now our final recommendation. Any attempt to exclude or restrict liability for breach of the four implied terms of correspondence and quality will only be subject to the fair and reasonable test when the party disadvantaged by the term dealt on the other party's written standard terms of business.

2.27      We did not propose to change the existing rule that renders automatically void attempts to exclude liability for breach of the implied term that the seller is entitled to sell the goods. This term is set out in section 12 of the Sale of Goods Act 1979 and associated legislation.^[19] In broad terms, it states that the seller has the right to sell, that the goods are free from any undisclosed charge or encumbrance and that the buyer will enjoy quiet possession of the goods. Under UCTA section 6(1) [section 20(1)], the implied term cannot be excluded from contracts of sale or hire purchase. Similarly, UCTA section 7(3A) [section 21(3A)] states that it cannot be excluded from contracts for barter or exchange, or from contracts for work and materials.

2.28      We did, however, propose some deregulation in respect of contracts for hire. At present, in contracts for hire, it is possible to exclude terms that the supplier is entitled to hire out the goods provided that the exclusion is reasonable. This is set out in UCTA section 7(4) [section 21(1)(b)].^[20] We suggested in the Consultation Paper that any provision replicating this section should apply only to non-negotiated clauses. A small majority of those who responded to the question agreed that restricting these provisions to non-negotiated clauses would either make no practical difference or would have a marginal but desirable effect. This is now our final recommendation. Terms which exclude or restrict liability for breach of the implied undertaking that the supplier is entitled to hire out the goods will only be subject to the fair and reasonable test when the party disadvantaged by the term dealt on the other party's written standard terms of business.

2.29      Although the lessening of legislative controls over business contracts is not itself within the terms of reference of this project, we believe this small deregulation is a desirable simplification to the unfair contract regime. It should achieve some reduction in uncertainty while making little difference in substance.

EXTENDING THE SCOPE OF PROTECTION FOR SMALL BUSINESSES (PART 5)

Background

2.30      Many of those who supported our Consultation Paper proposals for business contracts referred to the particular problems experienced by small businesses. We were struck by the fact that a number of those who opposed our Consultation Paper proposals for business contracts in general qualified their opposition in respect of small businesses. They noted that small businesses are more vulnerable and that additional protection may be appropriate here. Given this common theme in the responses, we decided to re-examine the case for small business protection.

2.31      At the seminar on small business contracts,^[21] we proposed extending to small businesses the same protections that we had been asked to consider extending to businesses in general. They are similar to those afforded to consumers under the UTCCR. In other words, the regime would apply a fairness test to all the terms of the contract other than the "core" terms. Examples of potentially unfair clauses against which businesses, unlike consumers, are not currently protected include:

deposits and forfeiture of money paid clauses;

default rates of interest (which are not shown to be penalties);

automatic extension of contract clauses;

price variation clauses;

entire agreement clauses;

arbitration clauses;

indemnity clauses; and

termination clauses.

2.32      Discussion at the seminar and subsequent responses to an informal discussion paper confirmed that, subject to one proviso, there is wide support for protecting small businesses, particularly those that can be considered quasi-consumers because of their vulnerability in the market. The support came from many sectors of industry, law firms, the Financial Markets Law Committee and others. The proviso was that the regime should not apply to small businesses operating in the financial sector, since these are often highly sophisticated, or to businesses closely associated with larger firms or companies. We agree. We also take the view that the protection should not apply to any type of contract that is not currently affected by UCTA so that, for instance, contracts of insurance should not be affected.

2.33      It is true that support was not universal. The CBI maintained that giving additional protection to small businesses would make it riskier to contract with them and consequently would work against their interests. This is an important point. However, it was the firm view of the representatives of small businesses who responded – and in particular the Federation of Small Businesses – that greater protection is very much needed. It appears that small businesses may prefer a reduction in the risks they face even at the possible cost of some loss of business.

2.34      Consumer contracts are also subject to another layer of control under the UTCCR which has no equivalent under UCTA. The UTCCR give the Office of Fair Trading ("the OFT") and other authorised bodies the power to prevent the use or recommendation of unfair terms. At the seminar and in subsequent discussion, there was some enthusiasm for similar preventive powers for terms in small business contracts; but it seemed unlikely that any appropriate body would be willing and able to take on the task.

Our recommendations

2.35      We recommend that, with certain exceptions, the protection against unfair terms given to consumers by the UTCCR should be extended to apply to small business contracts. Our detailed recommendations for small business contracts are set out and explained in Part 5 of this Report. The expanded protection which we now recommend is essentially to allow small businesses to challenge any type of standard term^[22] that has not been individually negotiated and is not a "core" term.

2.36      After some deliberation, we decided to define a small business in the new legislation by reference to the number of employees and not, for example, to turnover. We believe that this is the criterion which is most likely to be accessible to the other contracting party and is, therefore, most likely to promote certainty and predictability.

2.37      We decided to restrict our expanded protections to those businesses commonly called "micro" businesses.^[23] These businesses tend to be the most vulnerable and unsophisticated, with the fewest resources. They are therefore those most in need of protection. Outside this category, we believe that the imperative for protection is not so strong and is generally outweighed by the desirability of maximising commercial freedom of contract. We have therefore adopted a cut-off point of nine employees and the Draft Bill provides accordingly.^[24] It also contains a provision exempting from the regime those small businesses that are "associated with" larger businesses, for example, where they belong to the same group of companies. The Draft Bill contains a wide definition of "associated person"^[25] in order to exclude not only small businesses which are part of the same group of companies but also those that are effectively run in accordance with the wishes of more sophisticated commercial entities.^[26]

2.38      In the course of the project our attention was drawn to the problem of businesses that meet the employee numbers criterion but operate in such a high-value environment that it would not be appropriate for them to be subject to the controls of our proposed regime for small businesses. Specifically, these businesses might be small companies issuing securities, often referred to as special purpose vehicles ("SPVs"). We were told that it is quite common for such companies to have only a handful of employees but to do multi-million pound deals.

2.39      It was also pointed out that protections are largely unnecessary in areas where businesses dealing with small businesses are already regulated. In extending protections to small businesses in these situations we run the danger of over-regulating the market. The most obvious situation in which this might occur is that of contracts for the provision of financial services. Most contracts of this kind are already subject to regulation by the Financial Services Authority (FSA).

2.40      To make our proposed regime more sensitive to the needs of small businesses, we recommend that, in addition to an exemption for businesses that are associated with larger businesses, there should be two further exemptions. These are:

(1) a "transaction value limit" according to which contracts with a value greater than £500,000 or that are one of a series of contracts with a total value in excess of £500,000 are excluded from the small business controls;

(2) an exemption for financial services contracts.

2.41      In Part 5 we consider whether a small business should be able to challenge any "non-core" term that was not individually negotiated (the current criterion of the UTCCR) or only when such a term formed part of the other party's written standard terms of business. It is proposed to adopt a two limb definition of "non-negotiated" which will ensure that, before it can be challenged, a "non-core" term must (a) have been put forward as one of its written standard terms by the other (usually larger) business; and (b) not have been the subject of individual negotiation. This definition is intended to target standard terms and to leave bespoke contracts unregulated.

2.42      These proposed small business provisions are to apply as additional protection in any contract with a small business, whether that business is dealing with a large business or with another small business. In all other respects small businesses are treated the same as larger businesses. This means that small businesses can take advantage of the protections afforded by the preserved UCTA regime that operates in respect of business contracts in general. It also means that, vis-à-vis consumers, small businesses will count simply as businesses and will be subject to the controls set out in our recommendations for consumer contracts.

2.43      We think that these recommendations will deal with the types of unfair terms that have caused real problems to many small businesses.

MAKING THE NEW LEGISLATION "CLEARER AND MORE ACCESSIBLE TO THE READER"

2.44      An important aspect of the Law Commissions' duty is to attempt to make the law more accessible. This means accessible not only to lawyers but to all those affected by it. This is particularly important where the law has an impact on the day-to-day life of individuals or the day-to-day operation of businesses.

2.45      In the Consultation Paper we set out as one of our guiding aims the principle that any proposed legislation should be accessible to the business people and consumers affected by it. We considered that, at the very least, the legislation should be capable of being understood by consumer advisers, many of whom are not legally qualified, and any person in business who has some knowledge of contracting.^[27]

2.46      With this in mind, we decided to depart from our usual practice of appending draft legislation only to the Final Report and we included a draft in the Consultation Paper. This was not a full Bill but consisted of 18 sample clauses. We believed that sample clauses would facilitate consultation on the presentation as well as the substance of our proposals.

The Consultation Draft

2.47      In general, the Consultation Draft was well-received by consultees. The Plain English Campaign, for example, approved of its simplified style. It has therefore been used as the basis for the Draft Bill appended to this Report. That said, the Consultation Draft was far from complete: it dealt only with some parts of consumer contracts. In developing a legislative scheme for contracts across the board, it has been necessary to make significant changes to the Consultation Draft, affecting both substance and presentation. Nevertheless, accessibility, plain language and clear presentation have remained at the heart of the project and we believe that the Draft Bill appended to this Report reflects these. We have made every effort to draft a Bill in plain and intelligible language without detracting from the precision and certainty of its provisions.

2.48      In particular, the Draft Bill follows the Consultation Draft in containing separate parts for the particular controls that apply to each type of contract. Part 1 deals with exclusions and restrictions of business liability in negligence which apply to all types of business and consumer contracts, and also to notices in tort [delict]. Part 2 deals with consumer contracts and Part 3 deals successively with business contracts in general, small business contracts, employment contracts and private contracts. Although the Draft Bill has the same number of provisions as the Act and Regulations it replaces, we believe that it is much more accessible to its readers.

Defined terms

2.49      The Draft Bill follows the Consultation Draft in containing a general interpretation provision towards the end of the draft.^[28] In the Consultation Paper we suggested that the list of definitions should be placed at the end of the Bill because we think that the practice of starting with definitions can be off-putting to the lay reader.^[29]

2.50      The interpretation provisions of the Draft Bill^[30] have been drafted to refer to all defined terms, wherever the definition is located in the Bill. This provides a single point of reference for any reader wishing to establish the meaning of a term.

2.51      The Plain English Campaign suggested that we should highlight in the body of the text words and terms which were later defined. On first consideration, this seemed to be a useful idea. However, we have decided that it is just not practical.^[31] It would also be potentially misleading, as non-highlighted terms may be defined elsewhere – for example, by other legislation, the courts or European law.

2.52      However, most users of the Bill are in fact unlikely to read the Queen's Printer's copy, but a version in a guide or collection of legislation. There is nothing to prevent the publishers of such a guide or collection arranging for defined words to be highlighted in some way when they appear in the text.

The use of examples in legislation

2.53      There is one significant change from the Consultation Draft. The Consultation Draft included examples of the kind of term that amounts to an exclusion or restriction of liability within the meaning of the legislation or that fall within our replacement for the UTCCR's Indicative List of terms that may be regarded as unfair.^[32] While many consultees welcomed this, it was put to us that previous experience of using examples in legislation has not always been happy: the examples may quickly become out of date and may turn out to be incorrect. With the development of Explanatory Notes to accompany a Bill, examples in the Act are not necessary. Examples of the type that we included in the Consultation Draft are intended to help the lay reader but, as we have just said, lay readers are likely to refer to guides or collections of legislation which can include relevant extracts from the Explanatory Notes. On reflection, we have concluded that it would be more appropriate for the examples to be in the Explanatory Notes.

Note 1    Paras 4.22 – 4.29.    [Back]

Note 2    We did propose that UCTA, s 5 [s 19] should not be replicated. This was because it provides no additional practical protection for the consumer. See Consultation Paper, paras 4.27 and 4.205 – 4.207.    [Back]

Note 3    The history of UCTA, the Directive and the UTCCR (both the 1994 and 1999 versions which implement the 1993 Directive) is set out in the Consultation Paper, paras 2.10 – 2.16.    [Back]

Note 4    In Part III.    [Back]

Note 5    Tort is an English concept. Here, and in the discussion that follows, we refer to the Scottish equivalent, delict, in square brackets.     [Back]

Note 6    We do, however, recommend substantive changes to our consultation proposals is the area of evasion by choice of law, which are discussed in Part 7.    [Back]

Note 7    Paras 4.146 – 4.150.    [Back]

Note 8    Consultation Draft, clause 13.    [Back]

Note 9    The UTCCR make no provision for this burden and therefore it may be taken to fall on the party seeking to show that the clause is unfair, according to the normal course of proceedings.    [Back]

Note 10    Consultation Draft, clause 13(2), first version.    [Back]

Note 11    Our replacement for the Indicative List included the exemption and restriction of liability clauses currently caught by UCTA.    [Back]

Note 12    See Consultation Draft, clause 13(2) – (3), second version.    [Back]

Note 13    See Draft Bill, clause 16, and below, paras 3.124 – 3.130. In the context of enforcement proceedings and the exercise of preventive powers the burden of proof remains on the OFT, or other regulator, seeking to prove that a term in a consumer contract is not fair and reasonable.    [Back]

Note 14    See Consultation Paper, paras 4.80 – 4.81.    [Back]

Note 15    This is the effect of UCTA, s 3 [s 17] when the standard terms of employment are treated as written standard terms of business.    [Back]

Note 16    See UCTA, s 3 [s 17] and Consultation Paper, paras 3.13 – 3.14.    [Back]

Note 17    Sale of Goods Act 1979, ss 13,14 & 15. Similar terms are implied into hire-purchase contracts by the Supply of Goods (Implied Terms) Act 1973, ss 9, 10 & 11; into other contracts for the transfer of property in goods by the Supply of Goods and Services Act 1982, ss 3, 4 & 5 [ss 11C, 11D & 11E]; and into contracts for hire by the Supply of Goods and Services Act 1982, ss 8, 9 & 10 [ss 11I, 11J & 11K].    [Back]

Note 18    See below, para 4.25 – 4.29 and 4.36 – 4.40.    [Back]

Note 19    See also Supply of Goods (Implied Terms) Act 1973, s 8 and the Supply of Goods and Services Act 1982, s 2 [s 11B].    [Back]

Note 20    The relevant implied term is to be found in the Supply of Goods and Services Act 1982, s 7 [s 11H].    [Back]

Note 21    See above, para 1.13.    [Back]

Note 22    See para 5.68, below.    [Back]

Note 23    For statistical purposes, the Department of Trade and Industry usually employs the following definitions: micro firm: 0 – 9 employees small firm: 0 – 49 employees (includes micro) medium firm: 50 – 249 employees large firm: 250 employees and over.    [Back]

Note 24    Clause 27.    [Back]

Note 25    Clause 28.    [Back]

Note 26    See paras 5.45 and 5.52 – 5.54, below.    [Back]

Note 27    See Consultation Paper, para 2.35.    [Back]

Note 28    Draft Bill, clause 32; Consultation Draft, clause 18.    [Back]

Note 29    See Consultation Paper, para 8.21.    [Back]

Note 30    Draft Bill, clauses 25 – 32.    [Back]

Note 31    This is because: (1) it is not appropriate that the format of Bills should be changed without the express sanction of Parliament; (2) highlighting goes against what the Procedure Committees in Parliament have said about layout; (3) using bold and italic type would interfere with the way in which Parliament currently highlights some provisions in proposed legislation; and (4) highlighting text would further complicate subsequent amendment, and therefore interpretation, of legislation.    [Back]

Note 32    UTCCR, Sch 2.    [Back]