Abstract:
In consumer as well as in business-to-business contracts, exception clauses are used to allocate risk and liability in the event of a breach. The validity of such clauses turns upon issues of incorporation and construction and, where the English Unfair Contracts Terms Act 1977 (“UCTA”) applies, the satisfaction of the requirement of reasonableness. While the first two issues have received considerable discussion in Singapore cases, there is a dearth of authority on the third requirement, notwithstanding that it was affirmed in 1993 that UCTA applies in Singapore. The issue of reasonableness or fairness, however, has been widely considered, particularly in England and in a few other common law jurisdictions. Although courts must be given a wide discretion to determine what is reasonable on a case-by-case basis, the guidelines formulated in other jurisdictions may serve as broad points of reference. This article will focus on the requirement of reasonableness and suggest the broad criteria that may be applicable in appropriate cases.