These regulations set out what makes a contract term unfair and also provides some examples of terms that are likely to be unfair.
The regulations apply where a consumer is contracting on a trader's terms. The regulations don’t apply where you and the trader have negotiated the terms.
When is a contract term unfair?
A contract term can be deemed unfair if it creates a 'significant imbalance' in the trader and consumer’s positions.
For example, a term that allows the trader to fundamentally change the goods or services to be supplied under the contract, and at the same time giving the consumer no way out of the contract if they're not happy with the changes.
Terms must also be in plain and intelligible language and if they aren’t the interpretation that favours the consumer will apply.
Examples of unfair terms
The list of terms that are likely to be unfair includes the following examples:
- terms that allow the trader to unilaterally change the characteristics of the goods or services without good reason
- terms that allow the trader to keep an unreasonable amount of money as compensation if the consumer doesn’t keep to their side of the bargain
- terms that aim to take away the consumer’s legal rights
Which terms can’t be challenged?
Some terms can’t be challenged, in particular terms that set out what you are buying and how much it will cost.
So you can’t argue a term that sets out how much you will pay for goods or services is unfair if you find you could have got the same thing much cheaper elsewhere.