Unfair terms in consumer contracts

Cash register - consumer contracts

In Britain, the Unfair Terms in Consumer Contracts Regulations 1994 say that terms in consumer contracts must be in 'plain and intelligible language'. The regulations also say these terms must be accessible, which means they must use clear design and typography. Consumer contracts are those between a member of the public (a consumer) and a firm that is selling or supplying a product or service to them. If a consumer challenges a term, and it is found to be unclear or ambiguous, the court must interpret it in the way that best favours the consumer. The Office of Fair Trading regularly warns firms to change such terms before they are challenged in court.

Similar regulations apply to all countries in the European Union.

The Office of Fair Trading has very kindly allowed us to reprint some of the terms they have ordered firms to rewrite to meet the rules on clarity.

The firms concerned are now using revised terms. These changes help shatter the myth that replacing legal jargon with plain English sacrifices the legal meaning.

You can read more details about the Office of Fair Trading's work at http://www.oft.gov.uk/Consumer/Unfair+terms+in+contracts/default.htm


 

Here are some examples of 'before and after' clauses in consumer contracts.

Original term
'This Agreement and the benefits and advantages herein contained are personal to the Member and shall not be sold, assigned or transferred by the Member.'

New term
'Membership is not transferable.'


Original term
'The agreement shall determine forthwith if a receiving order is made against Hirer (or being a company Hirer goes into liquidation, whether voluntarily or compulsorily) or if Hirer shall call a meeting of his creditors or any distress or execution is levied against any of his goods.'

New term
'
If you are a customer we will end this agreement straight away if we find out that your belongings have been taken away from you to pay off your debts, or a receiving order has been made against you.'


Original term
'Lessor shall not be liable for loss of or damage to any property left, stored or transported by Hirer or any other person in or upon Vehicle either before or after the return thereof to Lessor. Hirer hereby agrees to hold Lessor harmless from, and indemnify Lessor against all claims based on or arising out of such loss or damage unless caused by the negligence of Lessor.'

New term
'We are only responsible for loss or damage to property left in the vehicle if the loss or damage results from our negligence.'


Original term
'Title to property in the goods shall remain vested in the Company (notwithstanding the delivery of the same to the Customer) until the price of the Goods comprised in the contract and all other money due from the Customer to the Company on any other account has been paid in full.'

New term
'We shall retain ownership of the goods until you have finished paying for them.'


 

Deleted terms

In some cases the Office of Fair Trading has persuaded firms that a term is unnecessary because it has no legal force or it says something that does not need saying. These are some of the terms that the Office of Fair Trading have asked firms to remove from their contracts.

  • 'Failure of the substrate to which our products are applied will nullify our guarantees.'
  • 'Severability - The clauses of these Conditions and each sub‑clause thereof are several and if any part of any clause or sub‑clause shall be void, invalid or unenforceable then the remainder of such clauses or sub‑clauses shall nevertheless be valid and enforceable.'
  • 'E & OE' (Which stands for 'Errors and Omissions Excepted'.)
  • 'The masculine includes the feminine gender and the singular shall include the plural and vice versa and a reference to a statutory provision will be interpreted as a reference to the provision as amended or re-enacted from time to time including any regulation or statutory instrument issued pursuant to such provision at any time.'
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