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 these terms and conditions cannot be unfair.
Both of 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 - but it's usually up to a court to rule if a term is unfair.
If you follow our advice, hopefully you can avoid things going that far.
You can also report a contract term you think is unfair to the Competition and Markets Authority (CMA) using use this form.
The CMA 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.
What is an unfair term?
A term may be deemed unfair if:
- It is contrary to the requirements of good faith - meaning it must be designed, negotiated and entered into with the consumer in a fair and open way.
- It causes a significant imbalance between the rights of the trader and consumer to the detriment of the consumer.
You can challenge hidden fees and charges because the Consumer Rights Act 2015 allows for key terms of a contract, including price, to be assessed for fairness unless the term is both prominent and transparent.
Some of the more common unfair terms are:
- Unbalanced rights Contract terms that give the trader certain rights that you, as a consumer, 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.
Report the trader to the CMA
If you decide you don’t want to pursue a claim in court, you can still take steps to help make sure other people don't fall foul of the same unfair contract term.
The Competition and Markets Authority (CMA) works to enforce consumer protection legislation and tackle practices and market conditions that make it difficult for consumers to make choices including unfair terms in consumer contracts and any issues related to poor competition.
You can use this form to report anti-competitive or market issues to the CMA.
You should also report the matter to your local trading standards department.
Terms you can’t challenge as unfair
All contract terms, including core terms, must be in plain and intelligible language otherwise you can challenged them as being unfair.
But you can't do the following under either regulation:
- 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
Three steps to challenge an unfair term and get your money back
1. Write to the company
If you think a particular term in your contract is unfair, write to the company explaining why, stating the amount of money you think you should get back.
If the company is demanding money from you, state that you consider the term they are relying on to be unfair, and that it can't be enforced against you.
You can use our template letter to challenge an unfair term.
2. Escalate your complaint
If the trader won't accept what you say, the next step is court action or a dispute resolution scheme, such as an ombudsman or arbitration scheme - if there's one for your type of complaint.
If you want to claim back money you believe you’re owed, you’ll have to take the company to court or use a dispute resolution scheme.
Alternatively, if the company says you owe it money, it may try to sue you for the amount it thinks it’s due.
Either way, your case will be that the term of the contract is unfair and shouldn't be enforced against you.
3. Go to court
If the amount involved is below the small claims limit (£10,000 in England and Wales or £3,000 in Scotland and Northern Ireland), the case may be dealt with in the small claims court.
If the amount of money involved is higher than the small claims limit, you’ll need some expert legal advice. And you'll probably need to appoint a solicitor to prepare your case.
You may be able to get free legal assistance through legal expenses insurance, which comes as part of your home or car insurance. Check your policies for details.
Before you start any court action, warn the trader in writing that this is what you’re going to do. If the trader sues you, there's a set time that you have for acknowledging the claim and getting your defence to court.
The letter you receive from the court should state these deadlines.
You should also ensure you’ve consulted and complied with the Pre-action conduct protocol which outlines all the steps you need to take before going to court. This would also apply to the trader.
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