Sudbury & Jones plc, an investment bank, has purchased a set of three cars for its managing directors from Benson's Dealership Ltd for both private and business use. Benson's agrees to let Sudbury & Jones have the cars at a reduced price in return for the insertion of a term excluding their liability for the breach of any implied term as to condition or quality or fitness for purpose. Within a month, while one of the directors is on holiday in Switzerland, his car catches fire due to the faulty installation of the cooling radiator, causing irreparable damage. Can Sudbury & Jones challenge the exemption clause and claim damages?
A) Yes, Sudbury & Jones purchased the cars as consumers. The clause is unenforceable under Part 1 CRA, which provides that certain terms, including as to satisfactory quality and fitness for purpose, are to be 'treated as included'.
B) Yes, when Sudbury & Jones purchased the cars it dealt as a consumer. The clause is outright invalid under UCTA.
C) Sudbury & Jones did not purchase the cars as consumers. The term is only invalid if it is not reasonable under section 6(3). UCTA.
D) No, neither UCTA nor CRA are applicable.

Question

Quizplus · Accepted Answer

Sudbury & Jones did not purchase the cars as consumers, as they are a business entity. The Unfair Contract Terms Act (UCTA) applies, and the exemption clause is only invalid if it is deemed unreasonable under section 6(3) of UCTA.

Sudbury & Jones Plc, an Investment Bank, Has Purchased a Set