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.

  • If you entered into the contract after 1 October 2015 then it will be governed by the Consumer Rights Act 2015.
  • If you entered into the contract before 01 October 2015 then it will be governed by the Unfair Terms in Consumer Contracts Regulations (UTCCRs).

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. 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 (CMA) which replaced the Office of Fair Trading in April 2014. 

You can use this form to report anti-competitive or market issues to the CMA. The CMA can then investigate and ultimately force a company to change its terms.

In summary

  • 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 challenge

You can challenge hidden fees and charges under the Consumer Rights Act as this legislation means that key terms of a contract, including price, may be assessed for fairness unless they are both prominent and transparent.  

This is an improvement for consumers because previously such terms were exempt from a fairness test if they were written in plain language.  

Terms may be deemed unfair if:

  • they are contrary to the requirements of good faith - meaning they must be designed, negotiated and entered into with the consumer in a fair and open way
  • they cause a significant imbalance between the rights of the retailer and consumer to the detriment of the consumer

If you entered the contract prior to 1 October 2015 the UTCCRs don’t cover what are known as core terms. For example, price-setting terms or terms that define a product.

Terms you can’t challenge

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

Terms deemed to be unfair

Some of the most common unfair terms are as follows:

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.

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