Businesses routinely include terms in their contracts that attempt to limit or exclude their legal liability to consumers. The Consumer Rights Act 2015 provides important protections against unfair contract terms, ensuring that consumers cannot be stripped of statutory rights by small print they may never have read.
What is an unfair contract term?
Under the Consumer Rights Act 2015, a term in a consumer contract is unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations under the contract, to the detriment of the consumer. If a term is found to be unfair, it is not binding on the consumer — though the rest of the contract may continue to apply if it can stand without the unfair term.
Terms that are automatically void
Certain terms are automatically unenforceable regardless of circumstances. Any term purporting to exclude or restrict liability for death or personal injury caused by negligence is void. Terms that purport to exclude the consumer’s statutory rights — such as the right to a refund under the Consumer Rights Act — are also automatically void. These cannot be rescued by making them subject to reasonableness.
The transparency requirement
Contract terms must be transparent and prominent — expressed in plain and intelligible language and brought to the consumer’s attention in a way they can reasonably be expected to notice. Terms buried in lengthy small print, in tiny font, or on the reverse of a document may be challenged on the basis that they are not sufficiently prominent. The test is whether a typical consumer would understand the term and its implications.
Common unfair terms in practice
Excessively long minimum contract periods with disproportionate early termination fees — particularly in gym memberships and broadband contracts. Terms that allow the business to vary price, service, or specification unilaterally without giving the consumer a right to exit. Terms that impose disproportionate penalties for minor breaches — such as large administration fees for missed payments. Blanket exclusions of liability for damage to property caused by the business’s employees. Each of these may be challenged as unfair under the Act.
Challenging an unfair term
If a business relies on an unfair term, you can challenge it by refusing to be bound by it and, if necessary, by bringing a court claim. The Competition and Markets Authority (CMA) also has the power to take enforcement action against businesses that use unfair terms systematically, and maintains guidance on which categories of term are likely to be unfair. A complaint to Trading Standards may also prompt investigation.
If a business is trying to rely on a contractual term to deny you compensation or rights you are legally entitled to, a solicitor can advise on whether that term is enforceable.