Unfair contract terms

Trained in two

Unfair Contract Terms

Every time we buy something, we are essentially entering into a legal contract. Ensuring the fairness of terms within any contract is an important part of consumer protection. The law can be complicated in this area, particularly when it comes to unfair contract terms. What are your rights if the terms of a contract are unfair? And how do you know?

When we use the word product or goods, we mean the same thing.

The law states

Businesses cannot take away your rights or use terms in a consumer contract or notice that are unfair. 

When we talk about contracts in this guide, we mean the agreements between consumers and businesses. Contracts are formed through offers, acceptance of the offer, consideration (something of value being passed between the parties), intention to create a contract and capacity to make that contract.  Once you have all these things you have a contract.

Contracts contain terms which map out what is expected of the business or the consumer for the length of the contract.

The law states that in order for contract terms to be considered fair, they must be:

  • Transparent: Terms must be clear, expressed in plain English, and legible.  (not small font for example)

  • Prominent: Important terms must be brought to the consumer's attention, ensuring awareness.  (in bold and big for example)

  • Fair: Terms must be fair.   A term is unfair if it causes a significant imbalance in favour of the business, contrary to good faith. (Weighted in the businesses favour and disadvantages the consumer)

In practical terms, this means that contracts must be transparent, important terms must be prominent (highlighted), and the overall balance of the contract should be fair for the consumer.

Ultimately a court decides if a term is fair.  However, you can seek further advice from trading standards via Citizens Advice on whether or not a term is unfair.

Expectations in Consumer Contracts

When consumers enter into contracts, they can rightfully expect:

  • Clear and understandable terms.

  • Transparency in how terms may be varied or changed.

  • Fairness in the overall balance of the contract.

Things that aren’t allowed

You cannot challenge the price or main subject area for unfairness.

There are certain terms that are blacklisted so are not allowed and certain terms which are on a grey list so could be unfair. All of the details of these are here in detailed government guidance.

However to give you an idea.

These terms are blacklisted and are NEVER allowed.  They are always illegal so not binding on you.

  • Terms that exclude or restrict responsibility for death or personal injury resulting from negligence. This applies even if you agreed to or knew about them

  • Terms designed to prevent or make it difficult for you to claim your legal rights and remedies when obtaining goods, services or digital content or by putting you at a disadvantage after doing so

  • The below are a couple of examples of terms that are on the grey list.

  • Terms that require you to pay a disproportionately high payment in compensation if you do not go ahead with a contract

  • Terms that allow a business to get out of the contract when they want to for any reason, but do not allow you to do the same

  • Terms that let a business keep a payment for services you haven’t had when it is the business who has cancelled the contract.

What to do if  you think a contract terms is unfair?

  • Seek advice from trading standards by calling Citizens Advice on 0808 223 1133.

  • Speak to the business and ask them to reconsider enforcing this term or to remove it

If a term or terms are unfair, the business cannot enforce them, they won’t be legally binding on you or any consumer.  However the whole contract will not fall down unless the unfair term removal means the rest of the contract doesn’t make sense and its not practical to do so. 

Speak to the business and clearly express your concerns and what you seek. If necessary, follow up in writing, including evidence of the unfair terms.

Rules for life

  • Be polite

  • Be clear in what you want

  • Keep a record of all letters and communications

If the business disputes what you are saying, direct them to this website, business need to know their rights as well.

For further advice contact Citizens Advice Consumer Service 0808 223 1133.

Have a listen to our podcast on unfair contract terms here:

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