Q. I have often heard that one can limit one’s liability for negligence through protective clauses. What exactly does this term mean? It is a very ordinary business precaution to limit liability for negligence. Though the intelligent layman is less ready than the lawyer to regard an error as likely to be negligent because he tends to regard negligence as something more heinous and unforgivable than the lawyer, who knows how easily it can on occasions occur and (if he is honest) how universally. Under the Unfair Contract Terms Act 1977 negligence is stated, among other things, as being the breach 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 which may itself contain protective clauses which attempt to avoid or limit liability. Protective clauses are of three essentially distinct types. They are those which:
1. Exclude or exempt one’s liability for specified aspects of one’s duty; 2. Limit or reduce what would otherwise be one’s duty; 3. Limit the extent to which one is bound to indemnify another person in respect of the consequences of
the breach of that duty.