Unfair Contract Terms Act 1977 - do they apply Business to Business (B2B)

[rdmanagement]

Hi,

 

I went to court to have judgement set aside; the Judge has ordered me to file my defence by the 14th October (a week on Friday).

 

I'm trying to argue that the Standard Contract Terms of the company I entered into contract with are Unfair. However, I was told by the Judge during the hearing that I had the ability to negotiate the contract; which I disagree with. The Claimant is owned by a multibillion pound private equity group, and me, the Defendant (Ltd company) is just me.

 

Is the judge wrong? Can I argue this one?

 

The Unfair Contract Terms Act 1977 section 3 states,

 

Liability arising in contract.E+W+N.I

(1)This section applies as between contracting parties where one of them deals as consumer or on the other’s written standard terms of business.

(2)As against that party, the other cannot by reference to any contract term—

(a)when himself in breach of contract, exclude or restrict any liability of his in respect of the breach; or

(b)claim to be entitled—

(i)to render a contractual performance substantially different from that which was reasonably expected of him, or

(ii)in respect of the whole or any part of his contractual obligation, to render no performance at all,

except in so far as (in any of the cases mentioned above in this subsection) the contract term satisfies the requirement of reasonableness.

 

What do you think?

 

Kind regards.

[Gaston Grimsdyke]

Yes UCTA does apply to B2B contracts. However, different provisions apply differently to consumer and business contracts (e.g. in relation to excluding liability for defective goods). What in particular is the clause in the contract that you are unhappy with?

[rdmanagement]

Many thanks for your response.

 

The Claimants Standard terms of business, clause 5 states:

In return for your payment of ourInvoice we will supply the Service. We will endeavour to begin supply of Informationfrom the agreement date, no later than 7 days thereafter. We will use ourreasonable endeavours to supply the Service to you at the frequency indicatedon the order form but time for delivery is not of the essence. We willendeavour to notify you where there is likely to be a delay. We reserve theright to change the format, frequency, presentation and content of the serviceand/or the Information without reference to you (but will only do so where weconsider such a change to be beneficial to you). You will not be entitled toupgrade the Service unless you pay a recalculated Subscription fee to takeaccount of the upgrade. We will use our reasonable endeavours to ensure thatthe Information is accurate at the time we obtain it, but cannot guarantee theaccuracy of any Information. We will endeavour to supply training within 30days of the agreement date, but cannot guarantee this. Failure to receive training,for whatever reason, does not constitute a right for you to terminate the subscription.

 

My interpretation of the clause is that they could provide nothing for the entirety of the agreement and I could still not Terminate the agreement.

[TweedleDee]

As the earlier poster stated, it does apply to B2B contracts.

 

May I ask who the provider is in this case if it does not identify you as the T&Cs are horrendous!

 

Back to the main point of your query. IMHO, the Judge is mistaken due to the following tests which have to be undertaken when looking to see if a term is reasonable or not:

 

- the strength of the bargaining positions of the parties relative to each other.

- whether you received any kind of inducement to accept the term or had another opportunity to contract with another party without that term.

- whether you should have been aware of the term with regard to previous dealings you had with the other party.

- whether the term restricts or excluded liability if some condition was not complied with when it was reasonable when you signed the contract that they would comply with that term.

- if the services were specifically tailored to you by a special order, therefore is custom to you and only you.

 

I would be looking at clauses 3 and 13 of that same act.

[rdmanagement]

Hi. Thanks for the response.

 

The Claimant and provider/supplier is Emap T/A Glenigan.

 

I did receive inducement (IMHO) and I had no bargaining power.

[TweedleDee]

Regarding inducements, did they give you a big discount? Offer you a holiday abroad?

 

It just makes the case weaker but is something to consider.

[rdmanagement]

No; their sales guy offered to give me his Linkedin connections.

[rdmanagement]

Oh; is the inducements a bad thing for me then?