6

I want to lease office space in England. I'm scared that Tenancy Agreement's Exclusion Clauses exclude too much! Aren't they too harsh on me? How's it fair for Landlord to exclude so much, and make me bear burden of "any loss of life or loss, injury or damage to person or property or for any disruption or inconvenience caused to or sustained by the Tenant"?

I read this Gowling WLG website dated 02 July 2018 on exclusion clauses and the reasonableness test under UCTA 1977. Indubitably I and Landlord don't have equal bargaining power! Landlord's more wealthier and powerful than me!

For example, Landlord and its agents are responsible for operating "lifts escalators and air conditioning system … " (see 7.1a) and hiring security "watchman" (see 7.1e). Thus shouldn't they liable "In respect of any loss of life or loss, injury or damage …" (see 7.1a and 7.1e)?

SECTION VII. EXCLUSIONS.

7.1 The Landlord and its agents shall not in any circumstances be liable to the Tenant, occupier or any other person whomsoever :-

Common Services and Facilities

(a) In respect of any loss of life or loss, injury or damage to person or property or for any disruption or inconvenience caused to or sustained by the Tenant, occupier or any such other person caused by or through or in any way owing to any defect in or failure or breakdown or suspension of the lifts escalators and air-conditioning system (if any) condenser water supply system (if any) electric power and water supplies, or any other common services and facilities provided in the said building for any reason whatsoever including negligent or wrongful acts or omissions by independent contractors; or

Electricity/Gas/Water Supply

(b) In respect of any loss of life or loss, injury or damage to person or property or for any disruption or inconvenience caused to or sustained by the Tenant, occupier or any such other person caused by or through or in any way owing to any failure, malfunction, explosion or suspension of the electricity or power or gas or water supply or other utility to the said building or the said premises for any reason whatsoever; or

Fire and Overflow of Water, Vermin

(c) In respect of any loss of life or loss, injury or damage to person or property or for any disruption or inconvenience caused to or sustained by the Tenant, occupier or any such other person caused by or through or in any way owing to the escape or spread of fire, smoke or fumes or any other substance or thing or overflow or leakage of water or vibrations from anywhere within the said building or the influx of rain water or sea water into the said building or the said premises or typhoon, landslide, subsidence of the ground or the flooding or the activity of termites, roaches, mice, rats or other pests or vermin in the said building or the act neglect default or omission of the tenants and occupiers of neighbouring premises or the defective or damaged condition of the said premises or the said building or the furnishings, fixtures and fittings therein or the dropping or falling of any article whatsoever from neighbouring premises; or

Non-enforcement

(d) In respect of any loss or damage howsoever caused by or through any non-enforcement of the provisions of the Deed, if any, in respect of the said building and such general rules, car park rules and club rules as may from time to time be made in accordance with the provisions of the Deed, if any, or non-observance thereof by any third party; or

Security

(e) For the security or safekeeping of the said premises or the said building or any persons or contents therein and in particular but without prejudice to the generality of the foregoing the provision by the Landlord and/or its agents of any watchman and caretaker or any mechanical or electrical alarm systems (if any) of whatever nature shall not create any obligation on the part of the Landlord as to the security of the said premises or any contents therein and the responsibility for the same shall at all times rest with the Tenant; or

Vehicles

(f) For the security or supervision of or for any damage to or loss of vehicles or accessories or injury to persons or any damage resulting therefrom.

And the Tenant shall indemnify and keep the Landlord fully indemnified against all claims and demands whatsoever made upon the Landlord by any servant agent employee contractor or licensee of the Tenant or any other person claiming through or under the Tenant as a result of any such loss or injury or damage aforesaid nor shall the rent and other charges hereinbefore mentioned or any part thereof abate or cease to be payable on account of the happening of any of the foregoing.

Exemptions Extend to Landlord's Agent and Manager

7.2 The Tenant hereby acknowledges that the exemptions contained in this Section also extend to the Landlord's agent(s) and the manager of the said building; or

No Duty for Landlord to Insure

7.3 Nothing in this Section shall be construed as imposing on the Landlord or the manager of the said building any duty to insure against any of the above liabilities; or [...]

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18

In my opinion the other answers have missed an important provision of the Unfair Contract Terms Act 1977 (or even disregarded the act altogether). For illustration, compare the following two sections:

Section 2(1) provides:

A person cannot by reference to any contract term or to a notice given to persons generally or to particular persons exclude or restrict his liability for death or personal injury resulting from negligence.

Section 2(2) provides:

In the case of other loss or damage, a person cannot so exclude or restrict his liability for negligence except in so far as the term or notice satisfies the requirement of reasonableness.

Note the key difference between the two. The latter provides an exception if the exclusion satisfies the reasonableness test contained in section 11(1). The former contains no such exception; you cannot exclude liability for death or personal injury resulting from negligence period. Many of the clauses you have quoted purport to do exactly that.

In this context negligence covers both contractual negligence arising from any express or implied duty of care (section 1(1)(a)) as well as tortious negligence (section 1(1)(b)). Express means that the contract contains a clause stating that the landlord has a duty of care. Implied means that such a duty is implied even without an express clause. For example the Supply of Goods and Services Act 1982 section 13 may imply such a duty:

In a relevant contract for the supply of a service where the supplier is acting in the course of a business, there is an implied term that the supplier will carry out the service with reasonable care and skill.

However, this could be excluded pursuant to section 16(1):

Where a right, duty or liability would arise under a relevant contract for the supply of a service by virtue of this Part of this Act, it may (subject to subsection (2) below and the 1977 Act) be negatived or varied by express agreement, or by the course of dealing between the parties, or by such usage as binds both parties to the contract.

In relation to other types of loss resulting from negligence, the burden of proof will be on the landlord (pursuant to section 11(5)) to show that the exclusion satisifes the test of reasonablness. The test itself is outlined in section 11(1):

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 relation to contractual non-negligence liability the UCTA only assists you if the lease is on the landlord's standard terms of business (i.e. not up for individual negotiation). If that is the case then liability for breach of contract can only be excluded if it satisfies the reasonable test, per section 3.

  • 2
    Out of curiosity, does the term "negligence" used above in reference to UK law refer to what US states would often refer to as "ordinary negligence" or "gross negligence"? Many US states would allow waivers of liability for the former but not the latter. – supercat Nov 3 '20 at 23:03
  • 1
    @supercat It doesn't matter whether or not the negligence is "gross" in terms of the applicability of the Act. The Act itself defines what is covered in section 1 (mentioned in the answer): inter alia; "(a) of any obligation, arising from the express or implied terms of a contract, to take reasonable care or exercise reasonable skill in the performance of the contract; (b) of any common law duty to take reasonable care or exercise reasonable skill (but not any stricter duty);". Note that the seriousness of the breach could potentially be an issue for the reasonableness test however. – JBentley Nov 4 '20 at 9:37
  • In the U.S., "gross negligence" describes conduct which is essentially reckless, except that claimed stupidity isn't a defense. For example, if a welder fails to place fireproof tarps over nearby combustibles and they ignite, that would be ordinary negligence. For the welder to then simply leave on the claimed expectation that the sprinkler system would automatically take care of the fire would elevate that to gross negligence, even if the welder could somehow prove that he thought fires were only dangerous in buildings without sprinklers, and always used tarps in such buildings. – supercat Nov 4 '20 at 15:43
7

As someone who acts for both landlords and tenants I would say that I have never seen exclusions for personal injury or death in a commercial lease. I would recommend that you have the whole lease reviewed by a solicitor dealing in commercial property, particularly as, as has been stated in another reply, exclusion of liability for personal injury or death is prohibited by UCTA. This would suggest there may be other provisions which, if not prohibited, are unreasonable and you should be aware of the commitments you are taking on prior to signing

This pure speculation, but the fact that those clauses would not be in a standard lease precedent does make me wonder if the landlord has done a DIY job and produced a lease from the internet suitable for another jurisdiction.

  • 2
    Note also that clauses can often have a practical effect even if not a legal one (similar to the "posession is 9/10ths" concept). The mere fact that the clause exists may put some people off from even trying to challenge it in court. Many people will comply with a clause merely because they believe they have to and don't realise it is unenforceable. – JBentley Nov 4 '20 at 9:45
3

This is all pretty normal for a commercial lease

In a commercial lease, the tenant is responsible for damage caused by the property to any third party unless caused by structural failure of the property. Your public liability insurance should cover all this.

  • 6
    This answer lacks nuance. The UCTA 1977 will render some parts of the lease unenforceable in some scenarios. E.g. consider clause 7.1(a): ""In respect of any loss of life or loss, injury or damage to person [..] owing to any defect in or failure or breakdown or suspension [..] for any reason whatsoever". Now imagine a breakdown causes a loss of life and that breakdown can be attributed to the landlord's negligence. The UCTA 1977, s 2(1) quite clearly prevents exclusion of liability in such a case, and provides no exceptions. Similar logic applies to many of the other clauses. – JBentley Nov 3 '20 at 16:40
2

You might want to try to determine if any of those waivers run contrary to public policy. Just because someone agrees to something in a contract does not mean what they've agreed to supersedes already established law. Oftentimes with waivers, there's a reason that they are there..so you agree in writing to waive your right to something.

Just because the property owner gets you to sign something doesn't mean it is or isn't legal. A contract that seeks to violate a law won't hold up in court, usually to the extent that there is a discrepancy. Common law recognizes that a contractual agreement that runs contrary to public policy is void, or at least voidable.

Whether or not that is applicable to you, I don't know but it's something to look into if you think that the landlord is trying to get you to sign away your rights.

1

Are they too onerous? That is for a court to decide. We cannot advise you on that, and even if we could, you're still free to negotiate or decline the contract; you are not forced to sign it.

It is possible that, given your unequal bargaining positions, a court may hold that the relevant clauses are too onerous under the Unfair Contract Terms Act 1977 but it would be highly fact specific.

If you are not comfortable with the proposed terms, try negotiating them or simply walk away.

-5

Of course they are not onerous. You are not forced to sign that contract/lease.

Go find some other place if you dont like those terms.

The market place will determine what is proper wrt terms and will be constrained only by the law not your feelings.

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  • 4
    "will be constrained only by the law" - that's the whole point. This is a law stackexchange and the OP wants to know what the law is. They weren't looking for a "common sense" answer about whether or not to sign. – JBentley Nov 4 '20 at 9:42

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