Understanding the Law on Unfair Terms and Conditions

The Competitions and Markets Authority (CMA) has launched a campaign to help customers know the rules on unfair terms and conditions and to help businesses keep within the law when it comes to unfair terms. But, according to a poll carried out by the CMA, 54 percent of business owners to not understand the rules themselves.

What Constitutes Unfair Terms and Conditions?

So what exactly do business owners need to be aware of when it comes to terms and conditions? Well, these are usually the terms that give businesses an unfair advantage over the consumer.

These can include, but aren't limited to, the following:

  • Enforcing an excessively long notice period that keeps customers tied into a contract for longer than they want.
  • Keeping all of a customer's deposit if they cancel, regardless of the actual cost of the cancellation to the company.
  • Excluding the business' liability for actions that are its fault, such as delays or faulty goods.

Companies should also be aware that even if they use the terms and conditions from larger companies as a basis for their own, they are not necessarily legal and binding.

Terms that cannot be Enforced

The CMA's research has also suggested that many companies believe that a signed terms and conditions contract means that their terms can be enforced, when, in actual fact, this simply isn't true. Terms such as the above can't be enforced if they are deemed unfair, despite them forming part of the contract.

Keeping on the Right Side of the Law

Companies which do try to impose unfair terms and conditions could find themselves on the receiving end of action taken by Trading Standards. The CMA stated that they are aware that most businesses wish to do right by their customers, but are simply unaware that their terms and conditions could be unfair.

For those companies that would like more guidance, the CMA has produced several videos and an at-a-glance guide to outlining fair terms and conditions, as well as producing a more detailed guide for those that wish to learn more. You can also discuss such matters with your local bookkeepers if you want some tailored advice.

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