i e AT 18 of 1980 MISREPRESENTATION AND UNFAIR CONTRACT TERMS ACT 1980

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1 i e AT 18 of 1980 MISREPRESENTATION AND UNFAIR CONTRACT TERMS ACT 1980

3 Misrepresentation and Unfair Contrat Terms At 1980 Index i e MISREPRESENTATION AND UNFAIR CONTRACT TERMS ACT 1980 Index Setion Page PART I MISREPRESENTATION 5 1 Removal of ertain bars to resission for innoent misrepresentation Damages for misrepresentation Avoidane of provision exluding liability for misrepresentation... 6 PART II UNFAIR CONTRACT TERMS 6 Introdutory 6 4 Sope of Part II Negligene liability Liability arising in ontrat Unreasonable indemnity lauses... 8 Liability arising from sale or supply of goods 8 8 Guarantee of onsumer goods and 10 [repealed]... 9 Other provisions about ontrats 9 11 Effet of breah Evasion by means of seondary ontrat... 9 Explanatory provisions 9 13 The reasonableness test Dealing as onsumer Varieties of exemption lause Interpretation of Part II PART III MISCELLANEOUS International supply ontrats Choie of law lauses AT 18 of 1980 Page 3

4 Index Misrepresentation and Unfair Contrat Terms At 1980 PART IV SUPPLEMENTARY Amendments Transitional and saving provisions [Repealed] Short title and ommenement SCHEDULE 1 13 SCOPE OF SECTIONS 5 TO 7 AND SCHEDULE 2 14 SCHEDULE 3 14 AMENDMENT OF CERTAIN ENACTMENTS 14 SCHEDULE 4 14 TRANSITIONAL AND SAVING PROVISIONS 14 SCHEDULE 5 15 ENDNOTES 17 TABLE OF LEGISLATION HISTORY 17 TABLE OF RENUMBERED PROVISIONS 17 TABLE OF ENDNOTE REFERENCES 17 Page 4 AT 18 of 1980

5 Misrepresentation and Unfair Contrat Terms At 1980 Setion 1 i e MISREPRESENTATION AND UNFAIR CONTRACT TERMS ACT 1980 Reeived Royal Assent: 17 Deember 1980 Passed: 17 February 1981 Commened: 1 July 1981 AN ACT to make further provision in the law relating to ivil misrepresentation; to impose further limits on the extent to whih ivil liability for breah of ontrat, or for negligene or other breah of duty, an be avoided by means of ontrat terms and otherwise; and for onneted purposes. GENERAL NOTE: Referene to a Board of Tynwald in s 16 is to be onstrued in aordane with the Government Departments At 1987 s 7. PART I MISREPRESENTATION 1 Removal of ertain bars to resission for innoent misrepresentation [P1967/7/1] Where a person has entered into a ontrat after a misrepresentation has been made to him, and the misrepresentation has beome a term of the ontrat; or the ontrat has been performed; or both, then, if otherwise he would be entitled to resind the ontrat without alleging fraud, he shall be so entitled, subjet to the provisions of this At, notwithstanding the matters mentioned in paragraphs and. 2 Damages for misrepresentation [P1967/7/2] (1) Where a person has entered into a ontrat after a misrepresentation has been made to him by another party thereto and as a result thereof he has suffered loss, then, if the person making the misrepresentation would be liable to damages in respet thereof had the misrepresentation been made fraudulently, that person shall be so liable notwithstanding that AT 18 of 1980 Page 5

6 Setion 3 Misrepresentation and Unfair Contrat Terms At 1980 the misrepresentation was not made fraudulently, unless he proves that he had reasonable ground to believe and did believe up to the time the ontrat was made that the fats represented were true. (2) Where a person has entered into a ontrat after a misrepresentation has been made to him otherwise than fraudulently, and he would be entitled, by reason of the misrepresentation, to resind the ontrat, then, if it is laimed, in any proeedings arising out of the ontrat, that the ontrat ought to be or has been resinded, the ourt or arbitrator may delare the ontrat subsisting and award damages in lieu of resission, if of opinion that it would be equitable to do so, having regard to the nature of the misrepresentation and the loss that would be aused by it if the ontrat were upheld, as well as to the loss that resission would ause to the other party. (3) Damages may be awarded against a person under subsetion (2) whether or not he is liable to damages under subsetion (1), but where he is so liable any award under subsetion (2) shall be taken into aount in assessing his liability under subsetion (1). 3 Avoidane of provision exluding liability for misrepresentation [P1967/7/3; P1977/50/8] If a ontrat ontains a term whih would exlude or restrit any liability to whih a party to a ontrat may be subjet by reason of any misrepresentation made by him before the ontrat was made; or any remedy available to another party to the ontrat by reason of suh misrepresentation, that term shall be of no effet exept in so far as it satisfies the requirement of reasonableness as stated in setion 13; and it is for those laiming that the term satisfies that requirement to show that it does. PART II UNFAIR CONTRACT TERMS Introdutory 4 Sope of Part II [P1977/50/1] (1) For the purposes of this Part, negligene means the breah of any obligation, arising from the express or implied terms of a ontrat, to take reasonable are or exerise reasonable skill in the performane of the ontrat; of any ommon law duty to take reasonable are or exerise reasonable skill (but not any striter duty); Page 6 AT 18 of 1980

7 Misrepresentation and Unfair Contrat Terms At 1980 Setion 5 () of the ommon duty of are imposed by the Oupiers Liability At (2) This Part is subjet to Part III; and, in relation to ontrats, the operation of setions 5 to 7 and 10 is subjet to the exeptions made by Shedule 1. (3) In the ase of both ontrat and tort, setions 5 to 10 apply (exept where the ontrary is stated in setion 9(4)) only to business liability, that is liability for breah of obligations or duties arising from things done or to be done by a person in the ourse of a business (whether his own business or another s); or from the oupation of premises used for business purposes of the oupier; and referenes to liability are to be read aordingly. (4) In relation to any breah of duty or obligation, it is immaterial for any purpose of this Part whether the breah was inadvertent or intentional, or whether liability for it arises diretly or viariously. 5 Negligene liability [P1977/50/2] (1) A person annot by referene to any ontrat term or to a notie given to persons generally or to partiular persons exlude or restrit his liability for death or personal injury resulting from negligene. (2) In the ase of other loss or damage, a person annot so exlude or restrit his liability for negligene exept in so far as the term or notie satisfies the requirement of reasonableness. (3) Where a ontrat term or notie purports to exlude or restrit liability for negligene, a person s agreement to or awareness of it is not of itself to be taken as indiating his voluntary aeptane of any risk. 6 Liability arising in ontrat [P1977/50/3] (1) This setion applies as between ontrating parties where one of them deals as onsumer or on the other s written standard terms of business. (2) As against that party, the other annot by referene to any ontrat term when himself in breah of ontrat, exlude or restrit any liability of his in respet of the breah; or laim to be entitled (i) (ii) to render a ontratual performane substantially different from that whih was reasonably expeted of him; or in respet of the whole or any part of his ontratual obligation, to render no performane at all, AT 18 of 1980 Page 7

8 Setion 7 Misrepresentation and Unfair Contrat Terms At 1980 exept in so far as (in any of the ases mentioned above in this subsetion) the ontrat term satisfies the requirement of reasonableness. 7 Unreasonable indemnity lauses [P1977/50/4] (1) A person dealing as onsumer annot by referene to any ontrat term be made to indemnify another person (whether a party to the ontrat or not) in respet of liability that may be inurred by the other for negligene or breah of ontrat, exept in so far as the ontrat term satisfies the requirement of reasonableness. (2) This setion applies whether the liability in question is diretly that of the person to be indemnified or is inurred by him viariously; is to the person dealing as onsumer or to someone else. Liability arising from sale or supply of goods 8 Guarantee of onsumer goods [P1977/50/5] (1) In the ase of goods of a type ordinarily supplied for private use or onsumption, where loss or damage arises from the goods proving defetive while in onsumer use; and results from the negligene of a person onerned in the manufature or distribution of the goods, liability for the loss or damage annot be exluded or restrited by referene to any ontrat term or notie ontained in, or operating by referene to, a guarantee of the goods. (2) For these purposes goods are to be regarded as in onsumer use when a person is using them, or has them in his possession for use, otherwise than exlusively for the purposes of a business; and anything in writing is a guarantee if it ontains or purports to ontain some promise or assurane (however worded or presented) that defets will be made good by omplete or partial replaement, or by repair, monetary ompensation or otherwise. (3) This setion does not apply as between the parties to a ontrat under or in pursuane of whih possession or ownership of the goods passed. Page 8 AT 18 of 1980

9 Misrepresentation and Unfair Contrat Terms At 1980 Setion 11 9 and 10 [repealed] 1 Other provisions about ontrats 11 Effet of breah [P1977/50/9] (1) Where for reliane upon it a ontrat term has to satisfy the requirement of reasonableness, it may be found to do so and be given effet aordingly notwithstanding that the ontrat has been terminated either by breah or by a party eleting to treat it as repudiated. (2) Where on a breah the ontrat is nevertheless affirmed by a party entitled to treat it as repudiated, this does not of itself exlude the requirement of reasonableness in relation to any ontrat term. 12 Evasion by means of seondary ontrat [P1977/50/10] A person is not bound by any ontrat term prejudiing or taking away rights of his whih arise under, or in onnetion with the performane of, another ontrat, so far as those rights extend to the enforement of another s liability whih this Part prevents that other from exluding or restriting. Explanatory provisions 13 The reasonableness test [P1977/50/11] (1) In relation to a ontrat term, the requirement of reasonableness for the purposes of setion 3 and of this Part, is that the term shall have been a fair and reasonable one to be inluded having regard to the irumstanes whih were, or ought reasonably to have been, known to or in the ontemplation of the parties when the ontrat was made. (2) [Repealed] 2 (3) In relation to a notie (not being a notie having ontratual effet), the requirement of reasonableness under this At is that it should be fair and reasonable to allow reliane on it, having regard to all the irumstanes obtaining when the liability arose or (but for the notie) would have arisen. (4) Where, by referene to a ontrat term or notie, a person seeks to restrit liability to a speified sum of money, and the question arises (under this or any other At) whether the term or notie satisfies the requirement of reasonableness, regard shall be had in partiular (but without prejudie to setion 18(5) of the Supply of Goods and Servies At 1996 in the ase of ontrat terms) to AT 18 of 1980 Page 9

10 Setion 14 Misrepresentation and Unfair Contrat Terms At 1980 the resoures whih he ould expet to be available to him for the purpose of meeting the liability should it arise; and how far it was open to him to over himself by insurane. 3 (5) It is for those laiming that a ontrat term or notie satisfies the requirement of reasonableness to show that it does. 14 Dealing as onsumer [P1977/50/12] (1) A party to a ontrat deals as onsumer in relation to another party if () he neither makes the ontrat in the ourse of a business nor holds himself out as doing so; the other party does make the ontrat in the ourse of a business; and in the ase of a ontrat governed by the law of sale of goods or hire-purhase, the goods passing under or in pursuane of the ontrat are of a type ordinarily supplied for private use or onsumption. 4 (2) But, on a sale by aution or by ompetitive tender, the buyer is not in any irumstanes to be regarded as dealing as onsumer. (3) Subjet to this, it is for those laiming that a party does not deal as onsumer to show that he does not. 15 Varieties of exemption lause [P1977/50/13] (1) To the extent that this Part prevents the exlusion or restrition of any liability, it also prevents () making the liability or its enforement subjet to restritive or onerous onditions; exluding or restriting any right or remedy in respet of the liability, or subjeting a person to any prejudie in onsequene of his pursuing any suh right or remedy; exluding or restriting rules of evidene or proedure; and (to that extent) setions 5 and 8 to 10 also prevent exluding or restriting liability by referene to terms and noties whih exlude or restrit the relevant obligation or duty. (2) But an agreement in writing to submit present or future differenes to arbitration is not to be treated under this Part as exluding or restriting any liability. Page 10 AT 18 of 1980

11 Misrepresentation and Unfair Contrat Terms At 1980 Setion Interpretation of Part II [P1977/50/14] In this Part business inludes a profession and the ativities of any Board of Tynwald, Statutory Board or loal authority; goods [Repealed] 5 negligene has the meaning given by setion 4(l); notie inludes any announement, whether or not in writing, and any other ommuniation or pretended ommuniation; personal injury inludes any disease and any impairment of physial or mental ondition. PART III MISCELLANEOUS 17 International supply ontrats [P1977/50/26] (1) The limits imposed by this At on the extent to whih a person may exlude or restrit liability by referene to a ontrat term do not apply to liability arising under suh a ontrat as is desribed in subsetion (3). (2) The terms of suh a ontrat are not subjet to any requirement of reasonableness under setion 6 or 7. (3) Subjet to subsetion (4), that desription of ontrat is one whose harateristis are the following either it is a ontrat of sale of goods or it is one under or in pursuane of whih the possession or ownership of goods passes; and it is made by parties whose plaes of business (or, if they have none, habitual residenes) are in the territories of different States (the United Kingdom and the Channel Islands being treated for this purpose as different States from the Island). (4) A ontrat falls within subsetion (3) only if either () the goods in question are, at the time of the onlusion of the ontrat, in the ourse of arriage, or will be arried, from the territory of one State to the territory of another; or the ats onstituting the offer and aeptane have been done in the territories of different States; or the ontrat provides for the goods to be delivered to the territory of a State other than that within whose territory those ats were done. AT 18 of 1980 Page 11

12 Setion 18 Misrepresentation and Unfair Contrat Terms At Choie of law lauses [P1977/50/27] (1) Where the proper law of a ontrat is the law of the Isle of Man only by hoie of the parties (and apart from that hoie would be the law of some ountry outside the Island), setions 5 to 8 do not operate as part of the proper law. 6 (2) This At has effet notwithstanding any ontrat term whih applies or purports to apply the law of some ountry outside the Island where (either or both) the term appears to the ourt or arbitrator to have been imposed wholly or mainly for the purpose of enabling the party imposing it to evade the operation of this At; in the making of the ontrat, one of the parties dealt as onsumer and he was then habitually resident in the Island, and the essential steps neessary for the making of the ontrat were taken there, whether by him or by others on his behalf. PART IV SUPPLEMENTARY 19 Amendments The enatments mentioned in Shedule 3 shall be amended in aordane with that Shedule. 20 Transitional and saving provisions The transitional and saving provisions in Shedule 4 shall have effet. 21 [Repealed] 7 22 Short title and ommenement (1) This At may be ited as the Misrepresentation and Unfair Contrat Terms At (2) This At shall ome into operation on suh date as the Governor in Counil may by order appoint, and different days may be so appointed for different provisions of this At. 8 Page 12 AT 18 of 1980

13 Misrepresentation and Unfair Contrat Terms At 1980 Shedule 1 1. Setions 5 to 7 do not extend to () Shedule 1 SCOPE OF SECTIONS 5 TO 7 AND 10 Setion 4(2) [P1977/50/Sh. 1] any ontrat of insurane (inluding a ontrat to pay an annuity on human life); any ontrat so far as it relates to the reation or transfer of an interest in land, or to the termination of suh an interest, whether by extintion, merger, surrender, forfeiture or otherwise; any ontrat so far as it relates to the reation or transfer of a right or interest in any patent, trade mark, opyright, design right, registered design, tehnial or ommerial information or other intelletual property, or relates to the termination of any suh right or interest; 9 (d) any ontrat so far as it relates (e) (i) (ii) 2. Setion 5(1) extends to to the formation or dissolution of a ompany (whih means any body orporate or uninorporated assoiation and inludes a partnership), or to its onstitution or the rights or obligations of its orporators or members; any ontrat so far as it relates to the reation or transfer of seurities or of any right or interest in seurities. 10 () any ontrat of marine salvage or towage; any harterparty of a ship or hoverraft; and any ontrat for the arriage of goods by ship or hoverraft; but, subjet to this, setions 5 to 7 and 10 do not extend to any suh ontrat exept in favour of a person dealing as onsumer. 3. Where goods are arried by ship or hoverraft in pursuane of a ontrat whih either speifies that as the means of arriage over part of the journey to be overed, or makes no provision as to the means of arriage and does not exlude that means, AT 18 of 1980 Page 13

14 Shedule 2 Misrepresentation and Unfair Contrat Terms At 1980 then, setions 5(2), 6 and 7 do not, exept in favour of a person dealing as onsumer, extend to the ontrat as it operates for, and in relation to, the arriage of the goods by that means. 4. Setion 5(1) and (2) do not extend to a ontrat of employment, exept in favour of the employee. Shedule 2 11 Shedule 3 AMENDMENT OF CERTAIN ENACTMENTS Setion 19 [Sh 3 amended by Sale of Goods At 1983 Sh 3 and by Consumer Safety At 1983 Sh 4, and amends the following At Supply of Goods (Implied Terms) At 1976 q.v.] Shedule 4 TRANSITIONAL AND SAVING PROVISIONS Setion 20 [P1967/7/5; P1977/50/29(1)-(3), 31(2)] 1. Nothing in Part I applies in relation to any misrepresentation or ontrat of sale whih is made before the ommenement of that Part. 2. Nothing in Parts II to IV or in any Shedule applies to ontrats made before the date on whih they ome into operation; but, subjet thereto, they apply to liability for any loss or damage whih is suffered on or after that date. 3. Nothing in Parts II to IV removes or restrits the effet of, or prevents reliane upon, any ontratual provision whih is authorised or required by the express terms or neessary impliation of an enatment; or being made with a view to ompliane with an international agreement under whih the Island is bound, does not operate more restritively than is ontemplated by the agreement. 4. (1) A ontrat term is to be taken for the purposes of Part II as satisfying the requirements of reasonableness if it is inorporated or approved by, or inorporated pursuant to a deision or ruling of, a ompetent authority ating in pursuane of any statutory provision and is not a term in a ontrat to whih the ompetent authority is itself a party. Page 14 AT 18 of 1980

15 Misrepresentation and Unfair Contrat Terms At 1980 Shedule 5 (2) In this paragraph ompetent authority means any ourt, arbitrator or government department; government department inludes a Board of Tynwald and a Statutory Board. Shedule 5 12 AT 18 of 1980 Page 15

17 Misrepresentation and Unfair Contrat Terms At 1980 Endnotes ENDNOTES Table of Legislation History Legislation Year and No Commenement Table of Renumbered Provisions Original Current Table of Endnote Referenes 1 Ss 9 and 10 repealed by Supply of Goods and Servies At 1996 Sh 4. 2 Subs (2) repealed by Supply of Goods and Servies At 1996 Sh 4. 3 Subs (4) amended by Supply of Goods and Servies At 1996 Sh 3 4 Para () amended by Supply of Goods and Servies At 1996 Sh 4. 5 Definition of goods repealed by Supply of Goods and Servies At 1996 Sh 4. 6 Subs (1) amended by Supply of Goods and Servies At 1996 Sh 3. 7 S 21 repealed by Sale of Goods At 1983 Sh 3. 8 ADO (whole At) 1/7/1981 (GC66/81). 9 Subpara () amended by Design Right At 1991 Sh. 10 Para 1 amended by Trade Marks At 1994 (P) (as applied by SI1996/729). 11 Sh 2 repealed by Supply of Goods and Servies At 1996 Sh Sh 5 repealed by Sale of Goods At 1983 Sh 3. AT 18 of 1980 Page 17

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