Commercial contracts

Benchmarking mechanisms in commercial agreements are intended to help customers to assess whether they are getting a good deal. But both suppliers and customers can sometimes end up feeling that the whole process is more trouble than it's worth. Our briefing looks at how you can strike the right balance.

It is relatively rare for contractual limitations of liability to fall foul of the Unfair Contract Terms Act 1977 (UCTA) – so you could be forgiven for thinking that businesses don't need to be too concerned about UCTA. But a recent ruling by the Court of Appeal challenges some commonly held assumptions about the legislation and may mean that it becomes more of an issue in future – particularly for suppliers using standard terms. 

As a result, businesses supplying on standard terms may find that customers will be more successful in claims that wide-ranging exclusions of liability are unreasonable under UCTA. It's best to avoid exclusions which are so sweeping that they remove any possibility of a meaningful remedy for serious breaches. Alongside that, suppliers should look to ensure that they always include a free-standing cap on liability – with a view to ensuring that even if certain blanket exclusions are found to be unenforceable under UCTA, the cap should survive (because without the cap, suppliers may face unlimited liability). Read this briefing for more.