R&B Custom Brokers Co Ltd v United Dominions Trust Ltd [1998] 1 WLR 321
Meaning of “consumer” and “in the course of business” in the Unfair Contract Terms Act 1977
Facts
The Claimant were a company engaged in activity as a shipping broker and freight forwarding agent. The company was however very small – comprised of just two individuals. The Claimant company purchased a second hand car from the Defendant. However, the car turned out to be in poor condition in that its roof leaked. This was argued to violate s.14(3) of the Sale of Goods Act 1979 on fitness for purpose. However, the contract for the purchase of the car included an exemption clause which sought to exclude liability under this requirement of the Sale of Goods Act 1979. The Claimant cited the Unfair Contract Terms Act 1977, specifically section 6 thereof, which stipulates that that requirement of the Sale of Goods Act 1979 cannot be excluded by any contractual term. However, the Defendant argued that as the Claimant was a company, they had entered into this contract in the course of business and not as consumer, meaning that they could not rely on the Unfair Contract Terms Act 1977.
Issues
The issue in this case was whether the purchase agreement as made in the course of a business and therefore whether the Claimant could rely on the Unfair Contract Terms Act 1977.
Decision/Outcome
It was held that in this instance the Claimant had entered into the contract as consumer. In order for the transaction to have been in the course of business for the purposes of s.12(1)(a) of the Unfair Contract Terms Act 1977, the activity covered by the contract would have to be central to the business in question which was not the case here (the Claimant’s business does not involve purchasing cars). Therefore, s.6 of the Act applies and the relevant provisions of the Sale of Goods Act 1979 remain mandatory – they cannot be excluded through the Defendant’s exclusion clause.
Updated 19 March 2026
This case summary is broadly accurate as a statement of the decision in R&B Custom Brokers Co Ltd v United Dominions Trust Ltd [1988] 1 WLR 321 (note: the correct year of the report is 1988, not 1998 as stated in the article heading). The interpretation of “dealing as consumer” under s.12 of the Unfair Contract Terms Act 1977 (UCTA 1977) and the “in the course of business” test as set out in this case remains good law for transactions falling within UCTA 1977.
However, readers should be aware of two significant developments. First, for most consumer contracts entered into on or after 1 October 2015, the Consumer Rights Act 2015 now governs the position, replacing the consumer-facing provisions of UCTA 1977 and the Sale of Goods Act 1979. Under the Consumer Rights Act 2015, a “consumer” is defined as an individual acting for purposes wholly or mainly outside their trade, business, craft or profession (s.2(3)). The R&B Custom Brokers approach to companies potentially qualifying as consumers is therefore less directly relevant to modern consumer disputes, since the 2015 Act applies only to individuals. UCTA 1977 continues to apply to business-to-business contracts. Second, the Sale of Goods Act 1979 s.14 remains in force for business-to-business sales, but for consumer sales the equivalent implied terms now appear in the Consumer Rights Act 2015. Students should ensure they apply the correct statutory regime depending on the nature of the parties and the date of the contract.
