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ARTICLE · 16 APRIL 2007

Are Contract Terms Really Binding? Part 1 of 2

This is a construction contract update.

United KingdomReal Estate and Construction

SECTION 1: GENERAL PRINCIPLES

(1) Unfair Contract Terms Act 1977

Scope

  1. The Unfair Contract Terms Act 1977 ("UCTA") is concerned with terms that exclude or restrict "business liability". This is defined at section 1(3) as:

    "liability for the breach of obligations or duties arising –

    1. from things done or to be done by a person in the course of business (whether his own business or another’s);

    2. from the occupation of premises used for business purposes of the occupier."

  2. Notably, by paragraph 1 of Schedule 1 the relevant provisions of UCTA do not extend to:

    " any contract so far as it relates to the creation or transfer of an interest in land, or to the termination of such an interest, whether by extinction, merger, surrender, forfeiture or otherwise.

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