Q&As

If a customer (C) contracts with a supplier (S) for the provision of a service and the supplier utilizes a third party (T) to provide advice as part of the provision of that service (advice on a subject in which S has no specialist knowledge) can S exclude all S’s potential liability to C for any losses arising from C relying on T’s advice?

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Produced in partnership with Jonathan Edwards of Radcliffe Chambers
Published on LexisPSL on 04/09/2017

The following Commercial Q&A produced in partnership with Jonathan Edwards of Radcliffe Chambers provides comprehensive and up to date legal information covering:

  • If a customer (C) contracts with a supplier (S) for the provision of a service and the supplier utilizes a third party (T) to provide advice as part of the provision of that service (advice on a subject in which S has no specialist knowledge) can S exclude all S’s potential liability to C for any losses arising from C relying on T’s advice?
  • Potential liability
  • The third-party aspect
  • The purpose of the contract
  • Consumer contracts
  • Contracts outside the 2015 Act
  • Conclusion

This Q&A considers generally applicable law and assumes that the relevant service/sector is not subject to specific laws, regulations, codes of conduct or the like (eg legal advice).

The limits on the ability of a supplier of services to exclude liability, in the particular context where part of those services is advice, which is actually given by a third party have been considered.

This Q&A only looks at what is possible for a supplier (S) to exclude, and not what S must do in order to achieve such exclusion. Fraudulent advice is also not considered.

Potential liability

Generally, a contract for the supply of services will include an implied term as to reasonable care and skill. In many circumstances, it is now unnecessary to look beyond the terms implied by statute, although implication of terms at common law may sometimes still be relevant. Where a trader supplies a consumer, the duty will now arise under section 49 of the Consumer Rights Act 2015 (CRA 2015). Where the supplier is acting in the course of a business but CRA 2015 does not apply, section 13 of the Supply of Goods and Services Act 1982 provides for an implied term that the supplier will carry out the service with reasonable care and skill. Distinct from the contractual liability, it is well established that there can be tortious liabil

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