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Smith v Eric Bush [1990] 1 AC 831

A survey report of the claimant’s house carried out by the defendant failed to advise on some structural damage to the property which resulted in the chimney breast collapsing. There was no contractual relationship between the claimant and defendant as the mortgage company arranged the survey and the claimant made payment to the mortgage company. The contract between the claimant and the mortgage company contained a clause exempting the surveyor from liability. In considering if such a clause was reasonable under the Unfair Contract Terms Act 1977 the court took into account the fact that it was a modest house to be used as the family home and concluded that it was an unreasonable clause and therefore ineffective. The House of Lords held that it might be reasonable for a surveyor to exclude liability if the property was of higher value or to be used for investment or business purposes.
 
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