Many businesses will seek to limit liability to their client or customer when supplying goods or services. Some businesses continue to use fine print terms or convoluted wording in their terms of business.

Standard terms were recently tested in the case of Phoenix Interior Design Ltd v Henley Homes plc [2021] EWHC 1573 (QB). Were the standard terms of business incorporated into the agreement and were they reasonable and therefore enforceable (UCTA 1977). The terms contained the following attempt to limit liability.

‘the [claimant] shall be under no liability under the warranty [that goods will correspond with their description and be defect-free for 3 months] (or any other warranty, condition or guarantee) if the total price of the Goods has not been paid by the due date for payment…’

Whether this was incorporated as a term of the contract:

‘…depends on whether that which each party says and does is such as to lead a reasonable person in their position to believe that those terms were to govern their legal relations…’ Balmoral Group v Borealis [2006] EWHC 1900 (Comm)

Mr Justice Freedman commented:

“This apparently unusual clause is tucked away in the undergrowth of the Standard Terms and Conditions”

And also concluded that:

‘The claimant had failed to show the clause was reasonable.’

The message – communicate your terms of business clearly, fairly and in a timely manner. If you don’t, you might find that they aren’t worth the paper they’re written on (or screen they’re displayed on).

We can help with these issues and other aspects of your business. Contact any of our offices and ask for one of the Business Team or send a question to info@walkerfoster.com.

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This article must not be construed as legal advice. All cases are different on their facts and you should consult with us directly on your case.