The stock Case Study Example | Topics and Well Written Essays - 2250 words

The stock - Case Study Example Nigel has to establish that the shop owner cannot rely on the exemption clause in the standard terms of the contract. An exemption clause in a contract purports to exclude liability of one of the parties to the contract, under certain circumstances. The Statute sets out that no contract term can exclude or limit liability in any way for negligently causing death or injury1. Furthermore, if there is other loss or damage, liability for negligence cannot be excluded or restricted if the term of notice is unreasonable. Finally, if a contract term or notice makes efforts to exclude or restrict liability for negligence, agreement to or awareness of this is not of itself to be taken as indicative of the voluntary acceptance of any risk2. Nigel was misled by the shop owner in respect of the usage of the rowing machine, in as much as the shop owner asked him to ignore the back pain that had afflicted Nigel after using the rowing machine. Hence, this incident can be classified under misrepresentation of facts, which renders the shop keeper liable for the injuries caused by the defective and unsuitable rowing machine. It is of paramount importance to determine whether the purchaser is a consumer or not. 'Consumer means any natural person who, in contracts covered by these Regulations, is acting for purposes which are outside his trade, business or profession'3. This expressly limits the definition of a consumer to a natural person and not companies. Adhesion contracts or standard form contracts, which present little or no choice to the party who has not drawn up the document, can be used to impose an exclusion clause. As Downes has pointed out, "The imposition of such exemption clauses may be particularly harmful in consumer contracts, where the disequilibrium between the bargaining positions of the parties may be substantial."4 This constitutes the reason for the existence of statutory controls on exclusion clauses, like the Unfair Contract Terms Act 1977 (UCTA) and the Unfair Terms of the Consumer Contract Regulations 1999 (UTCCR). The UCTA applies to the contract for the purchase of the rowing machine by virtue of section 1(3) which states that the Act applies to business liability which is defined as "liability for breach of obligations or duties arising from things done or to be done in the course of a business". The contract entered by Nigel is included by virtue of section 3 which covers consumer contracts and section 12 which states that a person deals as a consumer if he neither makes the contract in the course of a business nor holds himself out as doing so and the shop owner makes the contract in the course of business. Since, Nigel had purchased the Rowing machine for personal use at his residence the shop owner can not exclude liability for the breach of implied terms5. Reasonableness in respect of contract terms is clarified in section 11, which states that this tests if the clause is fair and reasonable "having regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the