The current pandemic crisis has raised the profile of Force Majeure clauses in contracts. As set out in a recent blog, these are contractual terms, almost always in the standard written terms and conditions of the party to the contract that is doing the supplying of goods and/or services, that states what happens if a given event makes performance of the contract problematic. The exact wording of the clause is extremely important but it is now apparent that many such clauses probably go too far and two Acts of Parliament (“Statutes”) prevent a Party to the contract taking the money and supplying nothing, or very little, in return.
Section 3 of the Unfair Contract Terms Act 1977 helps with commercial contracts. It states:
This section applies as between contracting parties where one of them deals on the other’s written standard terms of business.
As against that party, the other cannot by reference to any contract term 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.
And for consumers, Section 62 Consumer Rights Act 2015 states that no unfair contractual term or notice is binding on the consumer and specifically:
(4)A term is unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer.
(5)Whether a term is fair is to be determined—
(a)taking into account the nature of the subject matter of the contract, and
(b)by reference to all the circumstances existing when the term was agreed and to all of the other terms of the contract or of any other contract on which it depends.
John Hodge Solicitors can help if you have paid, or are expected to pay, under a contract when you are now being offered nothing, or very little, in return.