All liability exclusion neither onerous nor unreasonable

In Goodlife v Hall Protection, the Court of Appeal held an all liability exclusion clause was neither onerous nor unreasonable.

Goodlife bought a fire suppression system from Hall Fire. Despite the purchase, Goodlife suffered a devastating fire. Hall Fire’s standard conditions excluded all liability whatsoever for failure of the safety equipment.

Goodlife argued that it should not be bound by the exclusion clause because the clause was unusual and onerous, and had not been properly brought to its attention. Goodlife also said that it was unreasonable under the Unfair Contract Terms Act 1977 (UCTA). At first instance, Hall Fire succeeded on all counts, and Goodlife appealed.

It is a long-standing rule in contract law that unusual or onerous standard conditions are only incorporated into a contract if they have been fairly and reasonably brought to the other party’s attention. The principle derives from the so-called "ticket" cases in the 1970s when the court, and Lord Denning in particular, considered tickets referring to terms and conditions, which could be found on notices nearby the ticket machine.

Goodlife's contract was for a small sum as part of a one-off transaction without maintenance obligations. Hall Fire had separately offered to provide Goodlife with insurance against the risk of fire at a further cost. In the circumstances, the exclusion clause, while wide-ranging, was therefore neither unusual nor onerous. In any event, the clause was not buried in small print and had been clearly brought to Goodlife’s attention.

Goodlife’s claim under UCTA also failed. Among other things, the parties were of equal bargaining positions, Goodlife could have gone elsewhere, Goodlife knew of the exclusion, the product was off-the-shelf rather than being bespoke and Goodlife had the option of insurance which it declined to take up.