It is sometimes suggested that the courts only intervene based on the Unfair Contract Terms Act 1977 (UCTA) where there is inequality of bargaining power. But a recent case provides a reminder that UCTA can also apply where a contractual provision is regarded as particularly destructive of one party's rights – even where there is no obvious imbalance between the parties.
The offending term
In Phoenix Interior Design v Henley Homes (2021), the court had to consider whether the following provision (included in standard terms of supply) was reasonable under UCTA:
The Seller shall be under no liability under the above warranty (or any other warranty, condition or guarantee) if the total price of the Goods has not been paid by the due date for payment.
The case related to a dispute over the quality of furniture provided for an upmarket hotel in Scotland – for more detail, see our earlier briefing which discusses the quality issues in more detail. The Seller argued that, as the Buyer had withheld a substantial portion of the price, this clause meant that it had no liability for the quality issues raised by the Buyer. The court had to consider whether UCTA applied so as to render this clause unenforceable.