Terms and Conditions and the ACL

Services
1

A company we are considering hiring for a service includes the following in their T&C

6 LIMITATION OF LIABILITY

6.1 Nothing in these Terms and Conditions shall exclude or limit the liability of the Supplier for death or personal injury. However the Supplier shall not be liable for any direct loss or damage suffered by the Customer howsoever caused, as a result of any negligence, breach of contract or otherwise in excess of the price of the Services.

6.2 The Supplier shall not be liable under any circumstances to the Customer or any third party for any indirect or consequential loss of profit or other economic loss suffered by the Customer howsoever caused, as a result of any negligence, breach of contract, misrepresentation or otherwise.

It seems a bit over the top to absolve themselves of liability from their own negligence, and appears to clearly contravene the ACL stipulation for responsibility for ‘consequential loss’. It seems many companies still don’t get it.

While the omission of a comma suggests their intent is to limit their liability to the contracted cost it still seems out of bounds. Is it?

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2

This is approximately hearsay, but for what it’s worth 


I’ve been told a number of times by people that the enforcability or otherwise of individual clauses in a contract has nothing to do with a contracts overall legitimacy. I’ve received this advice professionally in relation to employment contracts - apparently not being illegal to put completely unenforcable clauses in - trick is when signing to know the difference. I’m not sure to what extent that is true, and how much the context can vary it.

I refused insurance from a removalist once - damage was done to a couple of items and property damage was done during delivery. The nature of the damage in each case was clear negligence/incompetence, but the removalist said even then I would not be covered because I hadn’t insured against it. I thought it was preposterous that I should have to take out insurance against such things 
 and fair trading agreed. The removalist paid up.

A formal legal opinion on these types of clauses above would be very interesting and helpful !

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3

I agree in full. I suspect they continue to put such clauses in to dissuade people, not because they are enforceable.

That being written I watched a 3-month circus whereby a government agency refused to sign a contract that had similar clauses and the US based supplier refused to remove them. It was a competitive tender and the agency learnt a lot about everything that needed to go into tender documents that they missed.

‘Canberra’ finally stepped in and told the supplier to remove the clauses or abandon the sale under default. It got signed quickly thereafter. :wink:

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4

Also, generally where there is a conflict/inconsistency between T&Cs and laws, the laws take precedence. The only exceptions is where a law specifically allows for agreements to be reached which may be different to that presented in the law. From my understanding, the ACL does not allow such agreements to be drafted
so the ACL will always preside.

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5

From my reading of a number of papers regarding this, it appears they can limit their “exposure” for acts of negligence.

I recommend you read the following:

(in the above the Conclusion is most interesting in regards to your question)

http://www5.austlii.edu.au/au/journals/UQLawJl/1989/2.pdf

(in the above the Conclusion is again most interesting in regards to your question)

and from “Law of Negligence and Limitation of Liability Act 2008 (NI)” is this

"6. Application to contract

(1) This Part does not prevent the parties to a contract from making express provision for their rights, obligations and liabilities under the contract (the express provision) in relation to any matter to which this Part applies and does not limit or otherwise affect the operation of the express provision.

(2) Subsection (1) extends to any provision of this Part even if the provision applies to liability in contract."

Section 60 of the ACL however states

"60 Guarantee as to due care and skill

If a person supplies, in trade or commerce, services to a consumer, there is a guarantee that the services will be rendered with due care and skill."

And from “https://www.lawhandbook.sa.gov.au/ch10s02s06.php” is this

"The exclusion also has to be legal. There are some important obligations to a consumer that are placed on a trader and these are implied by statute into consumer contracts and cannot be excluded, see: unsatisfactory goods and services and Exclusion Clauses and the Australian Consumer Law.

Courts always give exclusion clauses the narrowest reading possible, and where there is any doubt the interpretation most favourable to the consumer is adopted. An exclusion clause will generally not cover a breach which occurs outside the ‘four corners’ of a contract, such as where a trader does something that was not authorised by the contract.

Where a trader has attempted to limit or exclude liability of an implied term a consumer should seek legal advice as the law on this point is both complex and uncertain."

So as I wrote at the beginning they can’t totally exclude negligence but they maybe able to limit that liability.

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6

An article regarding Terms & Conditions.

And Choice’s takedown of Amazon Kindle’s T & C’s.

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Perhaps a useful tool in the task to understand ToS of many sites can be found at:

https://tosdr.org/

It is a plugin for Browsers that tries to rate the TOSs that we come across. There are plugins for most browsers.

There are some great examples of which TOS rate well or badly Facebook gets an E (really bad). Google gets a C, DuckDuckGo gets an A (very good).

The bad terms, good terms are listed to make it easier for a person to decide if they like the chances they take.

From their aims comes this " “I have read and agree to the Terms” is the biggest lie on the web. We aim to fix that. Get informed instantly about websites’ terms & privacy policies, with ratings and summaries from the www.tosdr.org initiative".

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