OFT to revise guidelines on unfair contract terms

The Office of Fair Trading (OFT) wants to crack down on companies that breach consumer law by using unfair statements in terms and conditions of contract (Ts & Cs).

The Government agency is revising its guidelines that outline what is acceptable under the 1999 Unfair Terms in Consumer Contracts Regulations. By doing this it hopes to increase consumer awareness of their rights and business awareness of the Regulations.

A term that is considered unfair is one that reduces the consumer's statutory or common law rights or which seeks to impose unfair burdens on them over and above the ordinary rules of law.

For example, statements on order forms such as "I have read the Conditions of Sale overleaf and agree to be bound by them" are unfair on consumers, in the OFT's view.

The OFT has a duty to consider any complaint it receives about unfair terms and where a term is considered unfair, enforcement action may be taken on behalf of consumers to stop its use; if necessary by seeking a court injunction in England and Wales or an interdict in Scotland.

If a court deems a term unfair, it is not binding on consumers but they continue to crop up in Ts & Cs leaving consumers at a disadvantage

This will be the first revision to this law and the OFT is currently conducting a six-week consultation. Although the OFT cannot provided advice or assistance to individuals, anyone who believes that any of the standard terms in a consumer contract they have signed are unfair they should contact Consumer Direct

The new guidance will also take account of the Enterprise Act of 2002 and the survey which the OFT conducted into its guidance last year.