| Clause 2 | In this Act, unless the context otherwise requires- | The definitions given to “negligence” and “requirement of reasonableness” align with the legal definitions of the said terms as has been established by case law. |
| "negligence" means the breach of an obligation arising from an express or implied term of a contract to take reasonable care or exercise reasonable skill in the performance of a contract; |
| "requirement of reasonableness" means a term that is fair and reasonable to be included in a contract having regard to the circumstances which were or ought to have been known when the contract was made. |
| Clause 3 A | The principal Act is amended by inserting the following new sections after section 3; | This clause marks a shift from the classic limitation of liability arising from negligence that is routinely provided for in contracts. The idea is to do away with unfair terms of contract and to tilt bargaining power more in favour of the consumer, who is oftentimes faced with “take it or leave it” standard term contracts. |
| 3A.(1)A person shall not, by reference to a contract term, exclude or restrict liability for death resulting from negligence. | The provision borrows from the United Kingdom’s Consumer Rights Act, 2015, which prohibits contractual exclusions or restrictions on liability arising from negligence. |
| (2) A person shall not, by reference to a contract term, exclude or restrict liability for loss or damage resulting from negligence, unless the term satisfies the requirement of reasonableness. | If the Bill is passed into law, parties ought to be aware that any attempt to contractually restrict or exclude liability resulting from negligence would be unenforceable, null and void, neither would a party be bound by any contractual term that purports to so restrict or exclude liability arising from negligence. |
| 3) Where a contract term excludes or restricts liability for loss or damage resulting from negligence, an agreement to the term by a person shall not indicate the person's voluntary acceptance of risk. |
| Clause 3 B | 3B (1) This section applies between contracting parties where one party is a consumer. | This clause prohibits the exclusion or restriction of liability for loss and damage suffered by a consumer arising out of breach of contract and also prohibits the supplier from rendering a contractual performance substantially different from that which was reasonably expected or rendering no performance altogether. This amendment is aimed at redesigning the performance obligations of suppliers and holding suppliers liable for any loss or damage suffered by a consumer as a result of any breach of contract. |
| (2) As against a party dealing as a consumer, the other party shall not, by reference to a contract term- | |
| (a) exclude or restrict liability for loss or damage when the supplier is in breach of the contract; or |
| (b)claim to be entitled- |
| (i) to render a contractual performance substantially different from that which was reasonably expected of the supplier; or |
| (ii) in respect of the whole or any part of the contractual obligation, render no performance at all. |
| (3) Despite subsection (1),a term that satisfies the requirements of reasonableness may be relied upon by the supplier. |
| Clause 3 C | 3C, (1) In the case of goods supplied for consumer use, liability for loss or damage shall not be excluded or restricted by reference to a contract term contained in or operating by reference to a guarantee of the goods where the loss or damage | Under common law, a guarantee was often seen as a benefit whereby if a consumer accepted the same, they were deemed to have accepted the limitations within it. This clause if enacted would prevent manufacturers from using a provision in a guarantee as a basis to limit liability |
| (a) arises from the goods proving defective while in consumer use; and | The definition of guarantee in this clause is quite broad. It captures not only formal manufacturer warranties but also promises like satisfaction guarantee. The Bill proposes that these warranties not only guarantee standard but that they cannot negate the consumer's expectation that the goods shall be of satisfactory quality and fit for purpose. |
| (b) results from the negligence of a person concerned in the manufacture or distribution of the goods. |
| (2)For the purposes of this section- |
| (a) goods are regarded as in consumer use when a person is using them or has them in possession for use other than exclusively for the purpose of a business; and |
| (b) anything in writing is a guarantee if it contains or purports to contain a promise or assurance that defects will be made good by complete or partial replacement or by repair, monetary compensation or otherwise. |
| Clause 3 E | 3E.(1)A person shall not exclude or limit their liability for loss or damage by reference to a contract term where the liability arises from breach of | This clause maintains the Bill’s standard of reasonableness when it comes to limitation of liability for loss or damage in case of a breach of warranty. Further, this clause reinforces statutory protections under the sale of Goods Act and Hire Purchase Act. This clause is likely to increase accountability for suppliers and reduce reliance on boilerplate clauses. |
| (a) A condition or warranty provided under section 14 of the Sale of goods Act; or Cap 31 |
| (b) A condition or warranty provided under section 8(1) of the Hire Purchase Act cap.507 |
| (c) |
| 2) As against a person dealing as a consumer, liability shall not be excluded or restricted by reference to a contract term where the liability arises from breach of |
| (a) a condition or warranty provided under section 15,16 or 17 of the Sale of Goods Act or Cap:31: |
| (b) the condition provided under section 8(2) of the Hire Purchase Act. Cap.507. |
| (3) As against a person dealing otherwise than a consumer, the liability specified under subsection (2) may be excluded or restricted by reference to a contract term unless the term satisfies the requirement of reasonableness. |
| Clause 3 F | 3F. (1) Where the property in goods passes under or in pursuance of a contract not governed by the law of sale of goods or hire purchase, subsections (2),(3) and (4) apply as regards the effect to be given to contract terms excluding or restricting liability for breach of obligation arising by implication of law from the nature of the contract. | This clause broadens the scope of the amendments to apply beyond traditional sale contracts. It prevents circumvention through creative structuring of contracts and ensures consistency across various contract types, the entire supply chain and hybrid commercial arrangements |
| (2) As against a person dealing as a consumer, liability, in respect of goods corresponding with the description or sample or the quality or fitness for a particular purpose of goods, shall not be excluded or restricted by reference to such term. | If the Bill is enacted into law, businesses and suppliers ought to rework their standard terms of contract and exclusion/restriction of liability clauses as they would carry the risk of nullification. |
| (3) As against a person dealing otherwise than as a consumer, liability in respect of goods corresponding with the description or sample or the quality or fitness for a particular purpose of goods may be excluded or restricted by reference to such a term in so far as the term satisfies the requirement of reasonableness. |
| (4) A person shall not exclude or limit their liability by reference to a contract term unless the term satisfies the requirement of reasonableness where the liability is in respect of- |
| (a) the right to transfer ownership of the goods or give possession; or |
| (b) the assurance of quiet possession to a person acquiring the goods in pursuance of the contract. |
