In researching terms and conditions, I came across a Report from the Office of Fair Trading (2011) on Consumer Contracts.

The Report recommends that consumer contracts are written to be open, welcoming and fair. The same applies to B2B contracts.

Be open

The Report defines open contracts as ones where:

“the terms [are] expressed fully, clearly and legibly, containing no concealed pitfalls or traps.”

The tips for writing fair contracts include making sure your contracts are realistic, easy to read, and simple. [This principle has since been adopted into the Consumer Rights Act 2015]

In ParkingEye v Beavis the Supreme Court reviewed whether £85 charged to a motorist for over-staying his car parking time was fairly displayed ie without concealed pitfalls or traps.  It matters whatever business you are in that your clients can read your contract words properly.

Do no harm

The Report wanted contracts which contained harmful terms to be singled out for their attention. The criteria for whether a contract was harmful included:

  • Are there any significant surprises in the small print?
  • Do consumers properly assess the deal and act on the implications?
  • Can consumers avoid the term?
  • Are there benefits that outweigh the harm?

Overall, the Report recommends clear upfront deals, backed up by small print that contains no hidden surprises.

What should you do?

Read your contracts? Are they clear? Do they contain hidden surprises?

Case: Cavendish Square Holding BV v Talal El Makdessi (Rev 3) [2015] UKSC 67

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