Birkett Long - Is your business operating fairly
The Office of Fair Trading has recently published an updated guidance booklet on the Unfair Terms in Consumer Contracts Regulations 1999. The Regulations apply a test of fairness to all standard contractual terms imposed by businesses on consumers. Although the guidance is not binding on the Courts, it explains why the OFT considers that certain types of standard terms in consumer contracts are unfair and the basis on which it is likely to take action under the Regulations. It therefore provides a valuable tool for businesses who wish to assess the enforceability of their standard contractual terms.
Annexed to the guidance is a comprehensive list of examples of standard terms which were selected from actual cases taken up by the OFT under the Regulations. These include terms that the OFT has successfully challenged as unfair and revised terms that businesses have undertaken to substitute in place of unfair terms. An example is a term in a contract with Microsoft providing that "the support provided hereunder shall be substantially as described" and excluding all other warranties. This was replaced by a term warranting that Microsoft would provide the support "with reasonable care and skill, within a reasonable time, and substantially as described in the Agreement".
The guidance also takes into account the coming into force of the Consumer Protection from Unfair Trading Regulations in April 2008. These Regulations ban businesses from engaging in unfair commercial practices against consumers, including unfair marketing and selling practices such as high pressure doorstep selling and false prize draws. Businesses and consumers alike may be surprised to learn that even trading practices that are widely accepted as the norm, such as adding an "optional" service charge to a restaurant bill, may be illegal under the Unfair Trading Regulations.
If you are a business and are unsure as to whether your standard contract terms or trading practices meet the current legal requirements, please contact Andrea Brown on 01245 453822 who will be able to provide you with up to date advice on all of the relevant issues. Birkett Long is also able to assist consumers who would like to find out whether they have a potential claim against a business imposing terms that appear to be unfair under the Regulations or engaging in an unfair trading practice.
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