Excluding or limiting liability for negligence

by Miles Harris, 4 New Square

A practice note that considers the methods for excluding or limiting liability for negligence. This practice note examines the common law position on drafting and incorporating effective exclusion and limitation clauses, with reference to principles of construction from key case law. It provides an overview of the significant statutory restrictions governing these clauses, including the reasonableness test under the Unfair Contract Terms Act 1977 (UCTA) for business liabilities and the separate fairness regime for consumer contracts established by the Consumer Rights Act 2015. The guidance also explores evolving areas such as the use of contractual estoppel and 'basis of dealings' clauses to prevent a duty of care from arising, which may fall outside the scope of UCTA and the Misrepresentation Act 1967. This practice note further addresses liability for negligent misstatement, the rights of third parties under the Contracts (Rights of Third Parties) Act 1999, and specific professional rules for solicitors and auditors.