Exclusion clauses—misrepresentation
Exclusion clauses—misrepresentation

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

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

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 is clearly set out in the contract.

Unfair contract terms

Exclusion clauses contained in contracts for the sale (or termination) of an interest in land are not subject to the reasonableness test in the Unfair Contract Terms Act 1977 (UCTA 1977), except those which purport to exclude liability for misrepresentation.

A provision which purports to exclude liability for misrepresentation is only valid in so far as it is