Unfair contract terms
- This guidance is for England, Scotland & Wales
If you wish to rely on the terms of the contracts you have with consumers it is essential that those terms are 'fair'. An unfair term is not legally binding on consumers, and enforcers can also take action to stop you using it.
The Consumer Rights Act 2015 covers the use of unfair terms in consumer contracts. Consumer contracts are those between traders and consumers (although this does not include employment contracts). As well as terms in consumer contracts the Act applies to certain consumer notices, whether or not they are in writing.
The Competition and Markets Authority (CMA) has produced various types of guidance on the subject.
- Unfair contract terms
The CMA has produced consumer protection and unfair contract terms guidance documents for businesses, which can be found on the GOV.UK website.
As well as the full guidance above the CMA has produced a series of shorter guides on writing fair contracts to help businesses use fair and clear terms in their consumer contracts and notices. These include the following two-page at-a-glance guides:
- Deposits, advance payments and cancellation charges
- Cancelling a contract: when and how
- Excessive charges and disproportionate sanctions
- Responsibility if things go wrong (limiting or excluding liability)
- Changing the terms of a contract (variation clauses)
- Subscriptions and automatic rollover
- Other terms that can be unfair
The CMA has also produced a series of short, animated videos help businesses understand more about the law on using unfair terms and conditions with consumers.
- Wedding & event venues
The CMA, on behalf of the Consumer Protection Partnership, has issued an advisory letter to over 100 major wedding and event venue providers across the UK. The letter raises businesses' awareness of the potential for consumer contract terms to be unfair and recommends that they ensure that their terms, and in particular their advance payment and cancellation terms, comply with consumer protection law.
The Enterprise Act 2002 creates the ability for enforcement bodies such as trading standards services to seek a court order preventing the failure to comply with the civil and criminal provisions of various pieces of consumer protection legislation, including the Consumer Rights Act 2015. If you fail to comply with such a court order the maximum penalty is a fine and two years' imprisonment.
- Key legislation
Last reviewed / updated: June 2017
This information is intended for guidance; only the courts can give an authoritative interpretation of the law.
The guide's 'Key legislation' links may only show the original version of the legislation, although some amending legislation is linked to separately where it is directly related to the content of a guide. Information on amendments to UK legislation can be found on each link's 'More Resources' tab; amendments to EU legislation are usually incorporated into the text.
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