Exclusion clauses in property contracts—misrepresentation
Exclusion clauses in property contracts—misrepresentation

The following Property guidance note provides comprehensive and up to date legal information covering:

  • Exclusion clauses in property contracts—misrepresentation
  • Common law
  • Unfair contract terms
  • Representations
  • Standard Conditions
  • Replies to enquiries
  • Drafting points

This Practice Note explains why exclusion clauses are used in property contracts and when they may be of no effect, including at common law in the context of fraudulent misrepresentation. It also covers the Unfair Contract Terms Act 1977 (UCTA 1977) under which clauses purporting to exclude liability for misrepresentation are subject to the reasonableness test, and considers case law in respect of the Standard Conditions in that regard.

Exclusion clauses aim to protect a party to a contract by excluding or limiting liability against claims for breach of contract or in tort.

In the context of property contracts, exclusion clauses are typically ‘non-reliance’ clauses, designed to exclude the seller’s liability for misrepresentation. Typical wording is as follows:

‘the buyer enters into this agreement solely as a result of his own inspection and on the basis of the terms of this agreement and not in reliance upon any representation or warranty written or oral or implied made by or on behalf of the seller (save for any representation or warranty contained in written replies given by the seller's solicitors to any written preliminary enquiries raised by the buyer's solicitors)’

Common law

At common law an exclusion clause will be ineffective if it seeks to exclude liability for fraudulent misrepresentation. It is possible to exclude liability for an agent’s fraud, but only if this