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Unfair Contract Terms Act 1977

Governs a trader’s ability to restrict his liability. Any clause restricting negligence liability for death/injury is void. The following clauses will be void unless reasonable. (a) those attempting to restrict negligence liability for loss or damage to property; (b) standard term clauses limiting liability for breach contract; (iii) those requiring a consumer to indemnify any other party for negligence or breach of contract. It also provides that a trader cannot exclude a consumer’s statutory rights under the Sale of Goods Act 1979. The Act lays down a test of reasonableness. Insurance policies are exempt from the Act.

Unfair dismissal

A statutory claim (Employment Rights Act 1996) entitling eligible employees to a compensation award by a tribunal. Dismissal is unfair if the employer fails to bring it within one of five permitted reasons: viz; conduct; capability; redundancy; illegality; or some other substantial reason. Employers can insure under Employment Practices Liability Insurance. Compare with wrongful dismissal.

Unfair Terms in Consumer Contract Regulations 1999

Stipulates that a term which has not been individually negotiated in a consumer contract is unfair if it causes a significant imbalance in the rights and obligations of the parties to the consumer’s detriment. The Director General of Fair Trading must consider any complaint made to him about the fairness of any contract term drawn up for general use The Regulations apply generally and so affect all insurance contracts with private individuals, but terms defining the product are not covered. This means that an insurer can limit the cover by including an excess. Other insurance terms may be deemed unfair.

Unfair Trade Practices Act

Regulatory model created by the National Association of Insurance Commissioners (NAIC) that established standards to prevent fraudulent or unethical practices in the insurance industry (e.g., misrepresentation, false advertising, misappropriation of policyholder’s money, twisting). States that have adopted the NAIC model may impose fines or revoke licenses of agents or brokers.

Unfunded life insurance trust

Trust established to distribute life insurance proceeds. Because insurance companies cannot act as trustees or guardians, the policy proceeds are paid to a trust company and distributed under the terms of a trust agreement creating greater flexibility in distribution of the proceeds. This type of arrangement is an unfunded life insurance trust.