The best word I can use to explain this legal concept with you is caution. Disclaimers (or Exclusions Clauses as they are also known) put simply are a denial or rejection of responsibility.
They seek to limit or exclude the risk of legal action being pursued against you, but the world of disclaimers is not as straightforward as maybe you would like and you would be wrong to assume that just by including such a clause in your contract means you are entirely risk free.
So what does the law say?
The regulation of this area of law all centres around fairness, with consumers having additional protection against terms which would be perceived as unfair even when common law or statute could permit their use.
As you may know the Unfair Contract Terms Act 1977 (UCTA) aims to reduce unfair terms in contracts.
Section 2 states that you can’t limit or exclude liability for death or personal injury caused by your negligence.
Thats why you would have all seen the provisions that state something along the lines of ‘nothing in these terms excludes any liability that cannot be excluded by law’.. Or the like.
It is also unlawful to mislead consumers about their legal rights under the Consumer Protection from Unfair Trading Regulations 2008, which repealed the earlier Consumer Transactions (Restrictions on Statements) Order 1976. This statutory instrument made it an offence to use certain kinds of unfair contract terms or notice.
In addition to that, contracts with consumers are governed by the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR).
Schedule 2 to the UTCCR states that the following would be unfair:
“excluding or limiting the legal liability of a seller or supplier in the event of the death of a consumer or personal injury to the latter resulting from an act or omission of that seller or supplier”
A contract term can never legally have the effect of excluding liability for death or injury caused by negligence in the course of business, and such terms should not appear in any contracts. As well as being unfair, they are also misleading to the public and could leave you open to risk of prosecution for unfair commercial practice so again go cautiously in this area and check in on your terms.
More general disclaimers, for example those stating that a customer’s use of equipment or premises is ‘entirely at their own risk’ even if they are not intended for that purpose are likely to be perceived as also seeking to cover liability for death or personal injury. It could be that you simply intend to stop consumers trying to sue for loss of or damage to their property where they have acted carelessly but the fact that the intention behind a term is more limited than its potential effects does not make it automatically fair.
Where a contract involves an inherently risky activity the use of warnings against hazards which provide clear guidelines and information, and make it very clear that the consumer needs to take sensible precautions may go some way in reducing the level of liability.
Arguably telling people they do something at their own risk is a limitation of liability in some case, and the OFT makes this point in its guidance on unfair terms. But you have to ensure that your terms are drafted correctly to achieve this benefit for instance in the case of an wellbeing event where you are seeking to limit liability for how people may feel after the event something along the following lines would be sensible;
“By attending this event, I agree that I will only take part if I am well and in good health. I understand that the organisers will take reasonable steps to promote my safety and that I must comply with all instructions given by the organisers and anyone else providing guidance at the event.”
Disclaimers may be acceptable if they are subject to a provision stating that liability for loss or harm is not excluded or restricted where the supplier is at fault, or is disclaimed ony where someone else, or a factor outside anyone’s control, is to blame. However, a disclaimer covering problems caused by a trader’s suppliers or subcontractors is sometimes regarded in the same way as one covering loss or damage caused directly by the trader’s own fault because the courts will sometimes take the view that a consumer has no choice as to they enter into a contract with and therefore has no contractual rights enforceable against the third party supplier.
So as you probably see the use of disclaimers is never going to be black and white other than you can be sure that it will never be lawful to seek or attempt to evade responsibility for causing death or personal injury as a result of your negligence . . .
I suppose the best way to look at it, while also trying to protect you and your business to the best lengths possible is to never try to deprive your customers of compensation in any circumstances in which they would normally be entitled to it by law.
I would love to hear your thoughts?
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