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Report No. 199

The basic features of Unfair Terms in Consumer Contracts Regulation, 1999 (UTCCR):

UTCCR are only concerned with contracts between consumers and sellers or suppliers. There are no terms that are automatically of no effect. Basically, the Regulations apply a 'fairness' test to terms in contracts between 'consumers' and 'sellers' or 'suppliers', which have not been individually negotiated and any unfair term does not bind the consumer. The test of unfairness (under Regulation 5) requires that contrary to the requirement of good faith, there should be significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

In addition, Schedule 2 under Regulation 5(5) contains an indicative and non-exhaustive list of terms, which may be regarded as unfair. Certain 'Core' terms are excluded from being the subject matter of fairness test, provided they are in plain intelligible language. The Director General of Fair Trading and qualifying bodies are given powers to try to prevent the continued use of unfair term drawn up for general use. Under the Regulation it is always for the consumer to prove that the term is unfair.

Unfair (Procedural and Substantive) Terms in Contract Back

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