Here at Which? we never tire of repeating the phrase: 'Always read the terms and conditions'.
If you don't, you could be in for a nasty surprise. But you are protected from unfair terms, so it's worth reading the small print.
Your right to challenge unfair terms
When you enter a contract – be that buying something, ordering something or paying for a service – you and the other party must follow the terms set out in that contract.
In general, companies are free to use whatever contractual terms and conditions they consider to be reasonable. But, the Unfair Terms in Consumer Contracts Regulations (UTCCRs) say these terms and conditions cannot be unfair.
These regulations state that you’re not bound by a standard term in a contract with a seller or supplier if that term is judged to be unfair. So, you have a right to challenge a contract term if you think it's unfair.
Only a court can decide whether a term is unfair. But, you can report a contract term you think is unfair to your local trading standards department or the Competition and Markets Authority.
From April 2014, the Office of Fair Trading (OFT) has been replaced by the Competition and Markets Authority (CMA) with regulation for lending to consumers moving to the Financial Conduct Authority (FCA).
You can use this form to report anti-competitive or market issues to the CMA.
These bodies can then investigate and ultimately force a company to change its terms.
- Companies are free to use whatever contractual terms they consider reasonable, but these terms can't be unfair
- Under these regulations, you're not bound by a term in a contract if that term is deemed unfair
- Excessive cancellation fees, changing the goods or service, or changing the price are all considered unfair terms
Terms you can’t challenge
The UTCCRs don’t cover what are known as core terms. For example, price-setting terms or terms that define a product.
All contract terms, including core terms, must be in plain and intelligible language otherwise they can be challenged as being unfair.
But you cannot do the following:
- Claim that a price you’ve agreed to pay is unfair because you found the same item cheaper somewhere else
- Claim a contract for an extended warranty is unfair because it offers much less cover than another one you could have bought for a similar price
- Challenge terms that you have negotiated with the seller. You can only challenge a contract’s standard terms and conditions
Terms deemed to be unfair
The UTCCRs include a list of types of contract terms that are considered unfair. Some of the most common ones are:
Contract terms that give the trader certain rights that you don't also enjoy can be considered unfair. For example, a contract that gives the trader the right to change the terms of the contract with 24 hours' notice, but says you’ve got to give six months' notice if you want to end the contract
Excessive cancellation fees
Terms that allow the trader to take too much of your money if you back out of a contract can be unfair. If you want to end a contract, a trader can claim for administration and marketing costs and for any work they had started, and loss of profit, but no more.
Changing goods or services
A trader can't have a term that allows them to change significantly what you are buying without giving you the chance to withdraw from the contract. For example, if you order a stainless steel toaster to match everything else in your kitchen, the trader can't have a term that allows them to send you one that’s plastic without giving you the chance to cancel your order and get a refund.
Changing the price
The seller's terms and conditions may state that your order is accepted only when it starts taking the items you've ordered off the shelves, and you'll be charged the price of the goods at that time. However, a contract term that states you must pay a higher price if prices rise after you’ve ordered could be considered unfair.