Unfair Contract Terms Act 1977 · 2020 Revised Edition · Part 1
11. “Reasonableness” test
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A contract term is reasonable if it was fair to include, given what the parties knew or should have known at the time. A notice is reasonable if relying on it is fair, given the facts when liability arose. For a fixed cap on liability, the person's resources and ability to insure matter. Whoever claims reasonableness must prove it.
Summary · Drafted with AI, checked against the official text on 30 Sep 2026.
In relation to a contract term, the requirement of reasonableness for the purposes of this Part and section 3 of the Misrepresentation Act 1967 is that the term shall have been a fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made.
In determining for the purposes of section 6 or 7 whether a contract term satisfies the requirement of reasonableness, regard shall be had in particular to the matters specified in the Second Schedule; but this subsection does not prevent the court or arbitrator from holding, in accordance with any rule of law, that a term which purports to exclude or restrict any relevant liability is not a term of the contract.
In relation to a notice (not being a notice having contractual effect), the requirement of reasonableness under this Act is that it should be fair and reasonable to allow reliance on it, having regard to all the circumstances obtaining when the liability arose or (but for the notice) would have arisen.
notice
“notice” includes an announcement, whether or not in writing, and any other communication or pretended communication;
Where by reference to a contract term or notice a person seeks to restrict liability to a specified sum of money, and the question arises (under this or any other Act) whether the term or notice satisfies the requirement of reasonableness, regard shall be had in particular (but without prejudice to subsection (2) in the case of contract terms) to —
the resources which he could expect to be available to him for the purpose of meeting the liability should it arise; and
how far it was open to him to cover himself by insurance.
It is for those claiming that a contract term or notice satisfies the requirement of reasonableness to show that it does.