## Facts

- Campbell Martin alleged that AXA Sun Life Services made false statements regarding the returns on financial products.
- AXA sought to prevent claims for misrepresentation by including contractual terms asserting that no reliance was placed on any pre-contractual statements.
- The central legal question concerned the classification of these terms: whether they functioned as “non-reliance clauses” (negating reliance) or as terms excluding liability for misrepresentation.
- The disputed terms were set within financial services contracts and required careful interpretation in light of the contract as a whole and the circumstances of its formation.

## Issues

1. Whether contract terms stating that no reliance was placed on pre-contractual statements constitute non-reliance clauses or liability exclusion clauses for the purposes of section 3 of the Misrepresentation Act 1967.
2. Whether such terms, if acting as exclusions of liability, must satisfy the reasonableness requirement in section 11(1) of the Unfair Contract Terms Act 1977.
3. How the objective intent of contract terms should be ascertained for the application of section 3.

## Decision

- The Court of Appeal determined that the disputed clauses were genuinely non-reliance clauses, meaning they established that no representations had been made or trusted.
- These non-reliance terms precluded a claim for misrepresentation from arising, rather than excluding liability for existing misrepresentations.
- As a result, section 3 of the Misrepresentation Act 1967, and its associated reasonableness test under section 11(1) of the Unfair Contract Terms Act 1977, did not apply.
- The Court distinguished between non-reliance clauses and clauses seeking to exclude liability for misrepresentation; only the latter fall within section 3.
- The objective interpretation of the contract terms and the actual agreement between the parties were critical in categorising the clause.

## Legal Principles

- A non-reliance clause, if genuinely reflecting the parties' intentions and agreement that no statements were relied upon, can prevent a misrepresentation claim from arising.
- Liability exclusion terms admit a misrepresentation could exist but seek to avoid accountability; such terms are subject to section 3 and must meet the statutory test of reasonableness.
- The distinction between these clauses depends on objective contractual interpretation and the actual substance of the parties’ dealings.
- Careful drafting and clarity in contractual terms are essential to achieve the intended legal effect.

## Conclusion

The Court of Appeal clarified that properly drafted non-reliance clauses, genuinely negating reliance on pre-contractual statements, fall outside section 3 of the Misrepresentation Act 1967 and do not require the statutory reasonableness test, providing valuable guidance for contract drafting and misrepresentation litigation.


AXA Sun Life Services plc v Campbell Martin Ltd [2011] EWCA Civ 133