If you are in a business whose customers are consumers, do you understand about unfair contract terms?  Recent research has shown that 54% of UK businesses do not.  Some common misunderstandings include:

  • if a contract is in writing, its terms are binding regardless; FALSE
  • If you trade on the same terms as a bigger company, they will be fair; FALSE
  • Its ok to include a term to penalise the customer if he’s in breach of contract; FALSE

and the one my client’s most often ask me about

  • Its ok to just hide that part in the small print; FALSE

The Competition and Markets Authority (CMA – it always makes me think of the Country Music Association!) has issued additional guidance on how to deal with consumers in a fair way.  To make the guidance more accessible, there are cartoon videos:

(https://www.youtube.com/playlist?list=PLJREEEp2I-xe8y6Xl_VXzViZQ3Aj19OFX)

quick glance guides:

(https://www.gov.uk/government/publications/fair-terms-for-your-customers-an-introduction-for-businesses)

and an online quiz: (https://maxcma.typeform.com/to/Wf3vPP).

The reality is, that to decide whether or not a contract term is fair, the circumstances of the parties at the time the contract was made, the value of the deal and the parties’ bargaining power will all have to be considered.  Some terms are always regarded as unfair, for example total exclusions of liability, and certain unfair terms are blacklisted, which means those terms will always be unenforceable.

So:

  • even when validly incorporated into your contracts, your terms may not be enforceable; TRUE
  • having the right terms and conditions is an exercise in risk management; TRUE
  • if you get it right at the start, your terms and conditions are effectively an insurance policy – only to be relied upon if things go wrong: TRUE

Don’t take a chance on your business, make sure your terms and conditions are compliant so that you can trade in confidence.

If you would like help with your terms and conditions, Jane Rudge is an experienced commercial solicitor who advises businesses on all aspects of their trading contracts.  For help and advice contact Jane on JRudge@thursfields.co.uk or 0121 227 3885.

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