News
9 June 2009
New Threat to Standard Terms and Conditions
“A recent Court of Appeal case, emphasising the need for “fairness” in terms and conditions, may have significant impact for those companies supplying goods or services to consumers,” explains Simon Woodings, “particularly where a ‘cut and paste’ approach has been taken to drafting consumer contracts.”
The Unfair Terms in Consumer Contracts Regulations 1999 give powers to the Office of Fair Trading (OFT) to obtain injunctions to prevent enforcement of an unfair term in existing and future contracts.
In this particular case the OFT brought an action against an estate agent claiming that their contracts with consumer landlords were unfair and were not in plain and intelligible language.
The estate agents concerned challenged the ability of the OFT to bring a claim as they were not a party to the contract. The court decided in favour of the OFT and this was upheld by the Court of Appeal. In allowing the appeal the court noted that EU member states have powers to prevent the continued use of unfair terms and without that power, consumers would not be adequately protected.
So why is this important to you?
The OFT (and other organisations that have the power to enforce the Unfair Terms in Consumer Contracts Regulations) can take collective action on terms they consider to be unfair and any decision will affect your existing and future consumer contracts containing such terms.
If you supply goods and services to consumers this could present a significant risk to your business in that if you have several hundred contracts in place an adverse finding will affect all of them.
It emphasises the need to consider carefully terms and conditions when issuing them to consumers and the need for fairness in those terms.
This should be of grave concern to any business that has used “cut and paste” techniques for its terms and conditions.
Do you require any assistance concerning terms and conditions please contact the corporate commercial team at Beswicks on 01782 205 000 and ask for Simon Woodings, Anne Scheland or Margaret West.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.
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