Hong KongControl of Exemption Clauses Ordinance, sections 7, 8, 10 and 11, limits on excluding liability for negligence and for defective goods
Control of Exemption Clauses Ordinance (Cap. 71), ss. 7-8, 10-11
In force since .
A product liability rule binding public and private bodies.
As of .
What it requires
- Do not rely on a contract term or a notice to exclude or restrict your liability for death or personal injury resulting from negligence; such a term or notice has no effect (s. 7(1)).
- A term or notice that excludes or restricts your liability for other loss or damage resulting from negligence is effective only in so far as it satisfies the requirement of reasonableness, and a person's agreement to or awareness of it is not of itself voluntary acceptance of the risk (s. 7(2), (3)).
- Where the other party deals as consumer or on your written standard terms of business, a term that excludes or restricts your liability for your own breach, or that lets you perform differently from what was reasonably expected or not at all, is effective only in so far as it satisfies the requirement of reasonableness (s. 8).
- Do not use a term or notice in a guarantee of consumer goods to exclude or restrict liability for loss or damage from a defect that results from the negligence of a person concerned in the manufacture or distribution of the goods (s. 10(1)).
- Against a person dealing as consumer, you cannot exclude or restrict liability for breach of the seller's undertakings as to description, sample, quality or fitness for purpose under sections 15 to 17 of the Sale of Goods Ordinance (s. 11(2)).
- Against a business buyer, an exclusion of the sections 15 to 17 undertakings is effective only in so far as it satisfies the requirement of reasonableness (s. 11(3)).
- Sections 7 and 8 do not apply to a contract so far as it relates to the creation or transfer of a right or interest in a copyright, patent, trade mark, registered design, technical or commercial information or other intellectual property (Sch. 1, s. 1(c)).
- These limits bind only business liability, meaning liability for breach of obligations or duties arising from things done or omitted in the course of a business (s. 2(2)).
These lines are LexLint's reading of the law's text, as of .
Who enforces it
Settledness
- As of
- Open questions
- Does goods in sections 10 and 11, which has the same meaning as in the Sale of Goods Ordinance, include software supplied on its own, given that the definition covers all chattels personal other than things in action and money?
What this law does
Section 7(1) of the Control of Exemption Clauses Ordinance provides that a person cannot by reference to any contract term or to a notice exclude or restrict liability for death or personal injury resulting from negligence. For other loss or damage, a person cannot so exclude or restrict liability for negligence except in so far as the term or notice satisfies the requirement of reasonableness.
Section 8 applies as between contracting parties where one of them deals as consumer or on the other's written standard terms of business, and the other cannot, except in so far as the term satisfies the requirement of reasonableness, exclude or restrict liability for its own breach of contract or claim to render a performance substantially different from that reasonably expected or no performance at all.
For goods of a type ordinarily supplied for private use or consumption, section 10 provides that liability for loss or damage that arises from the goods proving defective while in consumer use and results from the negligence of a person concerned in their manufacture or distribution cannot be excluded or restricted by a term or notice in a guarantee of the goods.
Section 11 provides that, against a person dealing as consumer, liability for breach of the seller's undertakings under section 15, 16 or 17 of the Sale of Goods Ordinance cannot be excluded or restricted by a contract term. Against a person dealing otherwise than as consumer, that liability can be excluded or restricted only in so far as the term satisfies the requirement of reasonableness. Sections 7 to 12 apply only to business liability.
Under Schedule 1, sections 7 and 8 do not apply to a contract so far as it relates to the creation or transfer of a right or interest in any patent, trade mark, copyright, registered design, technical or commercial information or other intellectual property, nor to contracts of insurance, interests in land, the formation or constitution of a company, or securities. Section 16 lifts the Ordinance’s limits for an exempted supply contract, a cross-border contract for the sale or supply of goods. The Ordinance came into operation on .
When LexLint raises it
When your app profile says your app crawls the web, trains models, generates content with AI, deploys a chatbot, sends automated outreach, makes high-risk automated decisions, processes voice recordings, processes biometric data, processes personal data, publishes adult content, operates a social platform, serves under-18s, operates an app store, ships a mobile app, reuses other publishers' content, distributes a software product, records calls, records text chat or tracks devices.