Exclusion And Limitation Clauses In Construction Contracts - Recent Developments

As Philip Barnes explains, consultants and contractors, as well as suppliers, are increasingly seeking to limit their potential exposure to clients (and others) in the construction contracts they agree. From their point of view this has the advantage that they can try to contain not only the types of loss which they may face should their work or advice be faulty, but also the total quantum of that potential loss. However as recent case law shows, these clauses must be clear and concise otherwise you may find they are deemed to be unfair and unenforceable.

Where one or other party puts forward its standard conditions, then substantial parts of those conditions may be written standard terms of business which fail to satisfy the requirement of reasonableness under the terms of the Unfair Contract Terms Act 1977. Section 3 provides as follows: