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use of 'consequential loss' in consumer contracts unfair in uk August 7, 2008

Posted by Bradley in : Uncategorized , trackback

The FSA says:

Under the Unfair Terms in Consumer Contracts Regulations 1999 (the Regulations) firms must ensure that they express any written term of a standard-form consumer contract in plain, intelligible language. In our view, a term which excludes ‘consequential loss’ is not written in plain, intelligible language, as it refers to an expression that has a legal meaning. We do not believe that the average consumer would understand the terminology, and therefore what they are not covered for under the policy.

The FSA that the following formulation is clearer, although it seems to me to involve issues of interpretation of the word “direct”, and therefore to contain some (unavoidable) ambguity:

‘We will only pay costs which are incurred as a direct consequence of the event which led to the claim you are making under this policy’.

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