Exception Clauses and the Consumer Protection Act

The Consumer Protection Act generally applies to transactions between a supplier acting in the ordinary course of business and a consumer. It does not typically apply to agreements between two businesses of comparable size, nor to certain categories of transaction that are specifically excluded from its scope. Because of this, the level of protection available against an unfair exclusion clause can depend heavily on the nature of the parties involved and the type of agreement in question.

One of the Act's central requirements is that suppliers must draw a consumer's attention to any term that is unusual, that limits the supplier's liability, or that places risk or responsibility on the consumer, before the agreement is concluded. The notice must be given in a way that is likely to attract the consumer's attention, considering factors such as the language, form and context of the agreement. In some cases, this means the consumer must sign or initial next to the specific clause, separately from signing the document as a whole.

This requirement exists because a general signature on the last page of a long document does not necessarily mean a consumer actually noticed or understood a particular exclusion buried several pages earlier. By requiring a more direct form of acknowledgement for risky terms, the Act aims to close that gap.

Even where a clause has been properly brought to a consumer's attention, the Act allows such terms to be challenged if they are unfair, unreasonable, unjust or deceptive. Factors that may be considered include the fairness of the bargaining process, whether the term is excessively one-sided, and whether it would be contrary to public policy to enforce it. This means that proper disclosure alone does not automatically make an exclusion clause valid.

The Act also protects certain consumer rights that cannot simply be excluded by contract, regardless of how clearly the clause is presented. These include rights relating to the quality and safety of goods and services. A supplier cannot, for example, use an exclusion clause to avoid responsibility for supplying goods that are unsafe or that fail to meet the standards the Act requires, since these protections exist independently of what the contract says.

• Look specifically for sections dealing with liability, risk or indemnity, since these are the clauses most likely to be subject to the Act's notice requirements.
• Check whether you were asked to sign or initial separately next to any limitation or exclusion clause, and request a copy of the full agreement if this did not happen.
• Remember that an exclusion clause affecting your statutory rights regarding the safety or quality of goods and services may not be enforceable even if you signed it.
• Keep a copy of any agreement containing exclusion clauses, since disputes often arise well after the original transaction took place.

Businesses drafting standard terms should ensure that clauses limiting liability are not only present but also properly highlighted in line with the Act's notice requirements. Simply including a clause in a long set of terms and conditions is unlikely to be sufficient if it deals with a matter the Act treats as requiring special attention.

This page provides general information about how consumer protection legislation interacts with exception clauses and is not a substitute for legal advice. Specific disputes should be assessed against the actual wording of the agreement involved and, where appropriate, referred to a qualified legal adviser or the relevant consumer protection authority.