Unfair Terms in Consumer Contracts

The Competition and Markets Authority (CMA) has published its findings from research into businesses’ behaviours regarding unfair terms in contracts with consumers. The research shows that 54% of the UK businesses surveyed do not fully understand the rules on unfair terms, which directly impacts how they treat their customers. In response, the CMA has launched a series of guides to inform businesses on what makes a term unfair.

The 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’.

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