Exclusion clauses and the Unfair Contract Terms Act 1977

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Platform terms contain extensive exclusions and limitations of liability. Singapore's Unfair Contract Terms Act 1977, a re-enactment of the English statute, controls them in three ways. Liability for death or personal injury caused by negligence cannot be excluded, and liability for other loss caused by negligence can be excluded only if the term is reasonable.¹ Where a party deals as a consumer or on the other's written standard terms of business, that other party cannot exclude or restrict liability for its own breach except in so far as the term is reasonable. The same test applies to a term claiming an entitlement to render a performance substantially different from what was expected.² Reasonableness is assessed under s 11 and the Second Schedule guidelines. The court has regard to the parties' relative bargaining strength, whether the customer could have contracted elsewhere without the term, whether the customer knew of the term, and whether the goods or services were adapted to the customer's order.³

Three features of exchange terms are vulnerable. The first is the blanket exclusion of liability for loss of customer assets "howsoever caused", which as applied to the platform's own negligence must pass the reasonableness test and will struggle to do so against retail customers. The second is the clause entitling the platform to suspend, freeze or close accounts "at its sole discretion", which falls within s 3(2)(b) as a claim to render a performance substantially different from what was expected. The third is the clause excluding liability for downtime during volatility, which is the moment when a customer most needs to trade. Courts in Singapore have applied the Act with some rigour to standard terms imposed on individuals, while giving commercial parties who negotiate at arm's length greater latitude.⁴

Platforms whose terms are governed by a foreign law do not thereby escape the Act. Section 27 provides that the Act applies notwithstanding a choice of foreign law where the choice appears to have been imposed wholly or mainly to evade the Act. It also applies where the customer dealt as a consumer, was habitually resident in Singapore and took the essential steps for making the contract there.⁵ A Singapore-resident retail customer who opened an account online from Singapore can therefore invoke the Act against an offshore exchange's exclusions, if she can get the exchange before a Singapore court.

Notes

1. Unfair Contract Terms Act 1977, s 2. ↩
2. Unfair Contract Terms Act 1977, s 3. ↩
3. Unfair Contract Terms Act 1977, s 11 and Second Schedule. ↩
4. Kenwell & Co Pte Ltd v Southern Ocean Shipbuilding Co Pte Ltd [1998] SGHC 316 and later cases applying s 11 of the Unfair Contract Terms Act 1977 to standard-form exclusions in Singapore. ↩
5. Unfair Contract Terms Act 1977, s 27(2). ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.