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’.

Does a business buying goods and services on line get any cancellation rights as consumers do?

Consumers enjoy cancellation rights by virtue of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 and, as the name implies these only apply to contracts between businesses and consumers. They do not apply to business to business transactions.

Therefore, unless there are cancellation rights given in the terms and conditions of the agreement, then there is no right of cancellation.

Can I apply a CE mark to toys that I am selling?

All new toys that are supplied in the course of a business must be marked with a CE mark (other details also need to be given).

The CE marking on a product is a declaration by the manufacturer of conformity with the law (i.e. amongst other things the CE mark declares that the toy is safe.)

If you are manufacturing the toys and selling them, then you must apply a CE mark. Clearly you must make sure that the product complies with the legal requirements that apply and be able to demonstrate this compliance.

If you are buying toys from a supplier within the EU then you should make sure that they are already CE marked.

If your supplier is outside the EU then you will need to ensure that they comply with the law and then apply the CE mark and your contact details as the importer (into the EU).


Southern Entrepreneurs – Training

29 Sep 2016

Wessex House – EASTLEIGH

Selling Legally On-line

The internet is the new high street and e-commerce is a great way of getting products and services to market. This course aims to help you make sure you don’t fall into the legal pitfalls thus reducing the competitive advantage, please note we will not be covering EU VAT rules.


Find out more …


I have been asked by a US company to do some work for them, what do I need to consider?

There are two main areas:

1 Insurance

With the advent of the Insurance Act in August 2016 you need to fully appraise your insurance company of the risk.

They will want to fully understand how you will ensure that this is something that you can undertake and also where you see the exposures i.e. if your advice turns out to be incorrect what could the consequences be?

Even if your current policy coverage is worldwide geographical they may only note it within the UK and would see working in countries particularly outside of the EU as higher risk by virtue of differences in the law, language, penalties etc. Insurers are very nervous when North America is mentioned.

2 Terms and Conditions

It is really important that you have well drafted terms and conditions in place and they refer to the jurisdiction for contractual disputes as being in your home country.

It is also important that your client accepts your terms and conditions and you do not end up working under theirs. If this is the only way they will do business be prepared to walk away.

My secondhand car is really not up to scratch, what can I do?

When you buy something as an individual i.e. not for your business, trade or profession you have certain Consumer Rights.  Citizens Advice Bureau give excellent advice on exercising these rights on their website www.citizensadvice.org.uk. Just go to the advice for the relevant country and type in the item you are having a problem with. They have all sorts of resources on the site including letters of complaint. I hope you find it useful.

(July 2016 Question 2)