From Law wiki, the wiki for law research

This case (Phillips Products v Hyland [1987] 1 WLR 659) demonstrates the action of the Unfair contract terms act (1977).

The plaintiff hire an excavator and driver from the defendent; the driver negligently drove the excavator into the plaintiff's building, causing damage. When sued for damages, the defendant relied on an exclusion clause that disclaimed libaility for negligent actions of drivers. The plaintiff argued that the exclusion clause was inadmissible under the UCTA, which states that a clause disclaiming liability for damage resulting from negligence must be shown to be reasonable.

The defendants tried to argue that the clause at issue was a duty-defining clause, and not an exclusion clause at all (which seems to be a standard defence in this kind of action). The court, acting in the spirit of the UCTA, deemed that the clause was defensive, not duty-defining, and therefore an exclusion clause under the Act. The defendant also claimed that the clause was reasonable, and could therefore be upheld even if it were construed as an exclusion clause. The court held that the plaintiff, which hired excavators only rarely, was not in a position to estimate the risk involved in doing so; the defendants, however, were operating in their main line of business, and should have been able to assess the risk accurately and take insurance to cover it. The clause was therefore deemed unfair and struck out.