Unfair Contract Terms (CAP. 451 1

CHAPTER 451

THE UNFAIR CONTRACT TERMS ACT

Arrangement of Sections
Section

1. Short title.
2. Interpretation.

PART I
Application, Sqbe

3. Application.
4. Scope of Part I.

PART 11
Avoidance of liability for negligence, breach of contract etc.

5. Negligence liability.
6. Liability arising on contract.
7. Unreasonable indemnity clauses.
8. Guarantee of consumer goods.
9. Sale and hire-purchase.

10. Miscellaneous contracts under which goods pass.
1 1. Dealing as consumer.
12. Effect of breach.
13. Evasion by means of secondary contract.
14. Test of reasonableness.
15. Varieties of exemption clauses.

Miscellaneous

16. International supply contracts.
17. Choice of law clauses.
18. Temporary provisions for sea carriage of passengers.
19. Saving.

FIRST SCHEDULE.
SECOND SCHEDULE.

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Unfair Contract Terms (CAP. 451 3

UNFAIR CONTRACT TERMS

An Act respecting exemption clauses in contracts or for
negligence.

(26th February, 1987.) 5,4987.

1. This Act may be cited as the Unfair Contract Sho*tide.
Terms Act.

2. In this Act- Interpretation.
"business" includes a profession and the activities of

any government department or local or public
authority;

"goods" includes all chattels personal other than things
in action and money; the term includes emble-
ments, industrial growing crops, and things
attached to or forming part of the land, which are
agreed to be severed before sale or under the con-
tract of sale:

"hire purchase agreement" means an agreement for
the bailment of goods under which the bailee may
buy the goods or under which the property in the
goods will or may pass to the bailee, and where by
virtue of two or more agreements none of which
by itself constitutes a hire-purchase agreement,
there is a bailment of goods and either the bailee
may buy the goods, or the property therein will or
may pass to the bailee, the agreements shall be
treated for the purposes of this Act as a single
agreement made at the time when the last of the
agreements was made;

"negligence" has the meaning given by section 5(1);

"notice" includes an announcement, whether or not in
writing, and any other communication or pretend
communication:

"personal injury" includes disease or impairment of
physical or mental condition.

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4 CAP. 451) Unfair Contract Terms

Application, Scope

Application. 3. This Act does not apply to contracts made before
the date on which the Act comes into force.

Scope of Part I. 4. (1) Part 1 of this Act is subject to Part 2 and sec-
tions 5,6 , 7, and 10 of this Act in so far as they relate to con-
tracts do not apply to those contracts listed in Item 1 of the

Fit Schedule. First Schedule.

(2) Sections 5 to 10 in so far as they relate to both con-
tracts and tort apply (except where the contrary is stated in
section 9(4)) only to business liability, being liability for
breach of obligation or duty arising-

( a ) from things done or to be done by a person in
the course of a business;

(b) from the occupation of premises used for
business purposes of the occupier.

(3) In considering a breach of duty or obligation it is
not material for the purposes of this Act whether the breach
was inadvertent or intentional or whether liability for
breach arises directly or indirectly.

Avoidance of liability for negligence, breach of contract etc.
Negligence 5. (1) No person may by reference to a contract
liabity. term or to a notice given generally or specifically to another

person, exclude or restrict his liability for death or personal
injury resulting from negligence.

(2) In the case of negligence resulting in loss or dam-
age other than death or personal injury no person may
exclude or restrict his liability except by a term or notice
that satisfies the requirement of reasonableness.

(3) A person's agreement to or awareness of a notice
or contract term, which purports to exclude or restrict lia-
bility for negligence is not per se to be taken as indicating
his voluntary acceptance of any risk.

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Unfair Contract Terms (CAP. 451 5

6. Where one party to a contract deals as consumer Liabilit~asin%on
or on the written standard terms of business of another conwct'
party (herein called the supplier), as against the consumer
or first named party, the supplier may not by reference to
a contract term-

(a) exclude or restrict liability in respect of his own
breach of the contract; or

(b) claim to be entitled-

(i) to render a contractual performance substan-
tially different from that which was reason-
ably expected of him; or

(ii) in respect of the whole or any part of his con-
tractual obligation, to render. no perfor-
mance,

except in so far as the contract term satisfies the require-
ment of reasonableness.

7. No person dealing as consumer shall be made Xr;;t;"ble
to indemnify another person whether a party to the con- claw,,
tract or not for liability that may be incurred by the other
person for negligence or breach of contract except by
a contract term which satisfies the requirements of reason-
ableness.

8. (1) Where goods are of a type ordinarily supplied Guarantee of con-
sumer Goods.

for private use or consumption and loss or damage-

( a ) arises from the goods proving defective while
in consumer use; and

(b ) results from the negligence of the person con-
cerned in the manufacture or distribution of the
goods,

liability for the loss or damage may not be excluded or
restricted by reference to a contract term or notice con-
tained in or operating by reference to a guarantee of the
goods.

(2) For the purpose of this section

(a) goods are "in consumer use" when a person is
using them, or has them in his possession for use other-

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CAP. 451) Unfair Contract Terms

Sale and hire-
purchase.

Cap. 393.

Cap. 201.

Miscellaneous
contracts under
which goods pass.

wise than exclusively for the purposes of a business;
and

(b) anything in writing is a guarantee if it contains
or purports to contain a promise or assurance however
worded or presented, that defects will be made good by
complete or partial replacement or by repair, monetary
compensation or otherwise.

(3) This section does not apply as between parties to a
contract under or in pursuance of which possession or own-
ership of the goods passed.

9. (1) No person may exclude or restrict by refer-
ence to a contract liability for breach of obligation arising
from

(a) section 14 of the Sale of Goods Act (seller's
implied undertakings as to title etc.);

(6) section 10 of the Hire-Purchase Act (condi-
tions and warranties to be implied in hire-purchase
agreements).

(2) No person may as against a person dealing as con-
sumer exclude or restrict by reference to a contract term lia-
bility for breach of obligation arising from sections 15, 16,
or 17 of the Sale of Goods Act (sellers implied undertakings
as to conformity of goods with description or sample, or as
to their quality or fitness for a particular purpose).

(3) As against a person dealing otherwise than as a
consumer the liability specified in subsection (2) may only
be excluded or restricted by reference to a contract term
that satisfies the requirement of reasonableness.

(4) This section applies to the liabilities referred to in
section 4 (2) and to any other liability arising under a con-
tract of sale of goods or hire purchase agreement.

10. (1) Where possession or ownership of goods
passes under or in pucsuance of a contract not governed by
the law of sale of goods or hire-purchase, this section applies
as regards the effect, to be given to contract terms exclud-
ing or restricting liability for breach of obligation arising by
implication of law from the nature of the contract.

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Unfair Contract Terms (CAP. 451 7

(2) Liability in respect of goods' correspondence with
description or sample, or their quality or fitness for a partic-
ular purpose may not as against a person dealing as con-
sumer, be excluded or restricted by reference to a contract
term.

(3) As against a person dealing otherwise than as con-
sumer, the liability referred to in subsection ( 2 ) may only be
excluded or restricted by reference to a term that satisfies
the requirement of reasonableness.

(4) Liability in respect of-

( a ) the right to transfer ownership of goods or
give possession; or

(6 ) the assurance of quiet possession to a person
taking the goods in pursuance of the contract,

may not be excluded by reference to a contract term which
does not satisfy the requirement of reasonableness.

1 . (1) A party to a contract deals as "consumer" D e w a s c o n -
sumer. in relation to another party if-

( a ) he neither makes the contract in the course of
a business nor holds himself out as doing so; and

( 6 ) the other party makes the contract in the
course of a business; and

( c ) in the case of a contract governed by the law
as sale of goods or hire-purchase, or by section 10 of
this Act, the goods passing under or in pursuance of
the contract are or the type ordinarily supplied- for pri-
vate use and consumption.

( 2 ) On a sale by auction or by competitive tender, the
buyer is not to be regarded as dealing as consumer.

(3) The onus of proving that a person does not deal as
consumer is on the person making the allegation.

12. (1) Where by this Act a contract term must satis- Effeaof breach. I
fy the requirement of reasonableness it may be found to do
so and be given effect notwithstanding that the contract

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8 CAP. 451) Unfair Contract Terms

may have been terminated either by breach or by a party
electing to treat it as repudiated.

(2) Where a party entitled to treat a contract as repudi-
ated on breach affirms the contract, the affirmation does
not of itself exclude the requirement of reasonableness in
relation to a term of the contract.

Evasion by means
of secondary con-

13. No person is bound by a contract term prejudic-
tract. ing or taking away rights of his which arise under or in con-

nection with the performance of another contract, where
those rights extend to the enforcement of another's liability
and where that liability may not by virtue of this Part be
excluded or restricted.

Test of reason-
ableness.

14. (1) For the purpose of this Part, the require-
ment of reasonableness in relation to a contract term is that
the term is a fair and reasonable one to be included having
regard to the circumstances which were or ought reasonably
to have been known to or in the contemplation of the par-
ties when the contract was made.

(2) In determining whether a contract term satisfies
the requirement of reasonableness for the purposes of sec-
tions 9 and 10, particular regard is to be had to the matters

Second Schedule. specified in the Second Schedule; but this subsection does
not prevent the court or arbitrator or arbiter from holding
in accordance with a rule of law, that a term which excludes
or purports to exclude or restrict a relevant liability is not a
term of the contract.

(3) The requirement of reasonableness in this Act, in
relation to a notice (not being a notice having a contractual
effect), is that it should be fair and reasonable to allow
reliance on it having regard to all the circumstances obtain-
ing when the liability arose, or but for the notice, would
have arisen.

(4) Without prejudice to subsection (2), where by ref-
erence to a contract term or notice a person seeks to restrict
liability to a specified sum of money, and the question arises
under this or any other Act whether the term or notice satis

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Unfair Contract Terms (CAP. 451

fies the requirement of reasonableness, particular regard is
to be had to-

( a ) the resources which could expect to be avail-
able to him for the purpose of meeting the liability
should it arise; and

(b) how far it was open to him to cover himself by
insurance.

( 5 ) The onus of proving that a contract term or notice
satisfies the requirement of reasonableness is on the person
making the allegation.

15. (1) To the extent that this Part prevents the l';c;;f
exclusion or restriction of liability, it also prevents-

(a) making the liability or its enforcement subject
to restrictive or onerous conditions;

(b) excluding or restricting any right or remedy in
respect of the liability, or subjecting a person to any
prejudice in consequence of his pursuing any such
right or remedy;

(c) excluding or restricting rules of evidence or
procedure;

and to that extent, sections 5 , 8, 9, and 10 also prevent
exclusion or restriction of liability by reference to terms and
notices which exclude or restrict the relevant liability.

(2) An agreement in writing to submit present or
future differences to arbitration is not to be treated as
excluding or restricting liability.

Miscellaneous

16. ( 1 ) The limits imposed by this Act on the extent Infematiodsu~ ply contracts.
to which a person may exclude or restrict liability by refer-
ence to a contract term do not apply to liability arising
under an international supply contract, and the terms of
such a contract are not subject to the requirement of rea-
sonableness under sections 6 and 7.

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10 CAP. 451) Unfair Contract Tmms

(2) For the purpose of this Act, an international supply
contract is a contract of sale of goods or a contract under or
in pursuance of which the possession or ownership of goods
passes, an( which is made by parties whose place of business,
or if they have none, habitual residences are in different
States.

(3) A contract is within subsection (2) if-

( a ) the goods in question are at the time of the
conclusion of the contract, in the course of a carriage,
or will be carried, from the territory of one State to the
territory of another;

(b) the acts constituting offer and acceptance
have been done in the territories of different States; or

( c ) the contract provides for the goods to be deliv-
ered to the territory of a State different from that with-
in whose territory the acts of offer and acceptance were
done.

Choice of law 17. ( I ) Where the proper law of a contract is the law
C ~ ~ U S ~ S . of Antigua and Barbuda by choice of the parties, and apart

from that choice would be the law of some country other
than Antigua and Barbuda, sections 5 to 10 do not operate
as part of the proper law.

(2) This Act has effect notwithstanding a contract term
which applies or purports to apply the law of some country
other than Antigua and Barbuda where-

(a ) the term appears to the court, arbitrator or
arbiter to have been imposed mainly for the purpose of
enabling the party imposing it to evade the operation
of this Act; or

(b) in the making of the contract one of the par-
ties dealt as consumer, and he was then habitually resi-
dent in Antigua and Barbuda, and the essential steps
necessary for making the contract were taken there,
whether by him or by others on his behalf.

Temporary provi- 18. (1) This section applies to a contract for car-
sion for sea car-
riage of riage by sea of a passenger or of a passenger and his luggage
passengem. where the Athens Convention does not have in relation to

the contract, the force of law in Antigua and Barbuda.

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Unfair Contract Terms (CAP. 451 11

(2) No person is precluded by this Act from excluding
or restricting liability for loss or damage, being loss or dam-
age for which the provisions of the Athens Convention
would, if they had the force of law in relation to the con-
tract, impose liability on him where-

(a) the contract is not made in Antigua and
Barbuda; and

(b) neither the place of departure nor the place
of destination under the contract is in Antigua and
Barbuda.

(3) In a case not mentioned in subsection (2), no per-
son is precluded by this Act from excluding or restricting
liability for loss or damage referred to in subsection (2) by
reference to a term of the contract-

(a) in so far as the exclusion or restriction would
have been effective in such a case had the Athens
Convention had the force of law in relation to the con-
tract; or

( b ) in such circumstances and to such extent as
may be prescribed by the Minister by Order subject to
affirmative resolution of Parliament.

(4) For the purposes of subsection (3) (a), the values
which shall be taken to be the official values in Antigua and
Barbuda of the amounts, expressed in gold francs, by refer-
ence to which liability under the Athens Convention is limit-
ed shall be such amounts in Eastern Caribbean dollars as
the Minister may by Order specify.

(5) In this section-

(a) a reference to excluding or restricting liability
includes doing anything mentioned in section 15 in
relation to the liability;

(b) the "Athens Convention" means the Athens
Convention relating to the Carriage of Passengers and
their Luggage by Sea, 19'74.

19. (1) This Act does not remove or restrict the Saving-
effect of, or prevent reliance on any contractual provision
which-

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12 CAP. 451) Unfair Contract T m

(a) is authorised or required by the express terms
or necessary implication of any law; or

(6) being made with a view to compliance with an
international agreement to which Antigua and
Barbuda is a party, does not operate more restrictively
than is contemplated by the agreement.

(2) A contract term is to be taken for the purpose of
Part I, as satisfying the reasonableness if it is incorporated or
approved by, or incorporated pursuant to a decision or rul-
ing of a competent authority acting in the exercise of any
specific function or jurisdiction conferred by an Act and is
not a term in the contract to which the competent authority
is itself a party.

(3) In this section "competent authority" means any
court, arbitrator or arbiter, government department or p u b
lic authority.

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Unfair Contract Terms (CAP. 451 13

FIRST SCHEDULE Section 4(1)

Scope of sections 5 ,6 ,7 , and 10 I

1. Sections 5, 6, 7 of this Act do not extend to-
I

(a) any contract of insurance, including a contract to pay an annuity on
human life;

(b) any contract so far as it relates to the creation or transfer of an inter-
est in land, or to the termination of such an interest, whether by extinction,
merger, surrender, forfeiture or otherwise;

(c) any contract so far as it relates to the creation or transfer of a right
or interest in any patent, trade mark, copyright, registered design, technical
or commercial information or other intellectual property, or i-elates to the
termination of any such right or interest;

(d) any contract so far as it relates to the formation or dissolution of a
company which means any body corporate or unincorporate association and
include a partnership, or its constitution or the rights or obligations of its cor-
porators or members;

(e) any contract so far as it relates to the creation or transfer of securi-
ties or of any right or interest in securities.

2. Section 5(1) extends to-
(a) any contract of marine salvage or towage;

(6) any charterparty of a ship; and

( c ) any contract for the carriage of goods by ship;

but subject to this, sections 5, 6, 7 and 10 do not extend to any such contract
except in favour of a person dealing as consumer.

3. Where goods are carried by ship in pursuance of a contract which either- '

(a) specifies that as the means of carriage over part of the journey to be
covered; or

(6) makes no provision as to the means of carriage and does not
exclude that means,

then section 5 ( 2 ) , 6 and 7 do not, except in favour of a person dealing as con-
sumer, extend to the contract as it operates for and in relation to the carriage of
the goods by that means.

4. Section 5(1) and ( 2 ) do not extend to a contract of employment, except
in favour of the employee.

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CAP. 451) Unfair Contract T m

SECOND SCHEDULE Section 14(2)

"Guidelinesn for Application of Reasonableness Test 8

The matters to which reiard is to be had in particular for the purposes of sec-
tions 9(3), lO(3) and (4) are any of the following which appears to be relevant:

(a) the strength of the bargaining positions of the parties relative to
each other, taking into account (among other things) alternative means by
which the customer's requirements could have been met;

(b) whether the customer received an inducement to agree to the term,
or in accepting it had an opportunity of entering into a similar contract with
other persons, but without having to accept a similar term;

(c) whether the customer knew or ought reasonably to have known of
the existence and extent of the term, having regard, among other things, to
any custom of the trade and any previous course of dealing between the par-
ties;

(4 where the term excludes or restricts any relevant liability if some
condition is not complied with, whether it was reasonable at the time of the
contract to expect that compliance with that condition would be practicable;

(e) whether the goods were manufactured, processed or adapted to the
special order of the customer.