News Ticker

Updated guidance on unfair contract terms

  • CMA issues updated guidance on recent Consumer Rights Act 2015 changes.
  • Act comes in to force 1st October 2015.
  • Applies to terms in a contract or other materials (and does not have to be written down).
  • Wording must be clear.

Original Author: CMA
Original Links: https://www.gov.uk/government/news/cma-updates-guidance-on-unfair-contract-terms

Content

The update has been created because of changes to the law in the Consumer Rights Act 2015 (the Act), which will come into force in October this year. The Act brings together and strengthens 2 pieces of legislation that target contract terms and notices which could be used to give businesses an unfair advantage in their dealings with consumers. The Competition and Markets Authority (CMA) has updated its existing guidance, taking account of recent case law on unfair terms.

The new guidance assists businesses with understanding what makes terms and notices unfair, what risks they can face from using unfair wording and top tips on how to ensure terms and notices are fair and clear. There are 3 levels of guidance – short (2 pages), expanded (28 pages) and full (144 pages), so that different users can access what is most appropriate to their needs. It includes an at-a-glance flowchart explaining how to apply the law on unfair contract terms.

The guidance identifies key things that businesses should do to ensure that they communicate clearly with consumers and avoid disputes arising from unfair terms. Alongside specific advice such as avoiding using legal jargon in contracts, the guide urges businesses to deal ‘openly and fairly’ with consumers and not to use terms you ‘would not like to sign up to yourself

Link to guidance: https://www.gov.uk/government/publications/unfair-contract-terms-cma37