The Unfair Terms in Consumer Contracts Regulations 1999

Reference: UK/1999/SI/2083

The Unfair Terms in Consumer Contracts Regulations 1999 apply, with certain exceptions, to unfair terms in contracts concluded between a consumer and supplier.

EU directive

The Unfair Terms in Consumer Contracts Regulations 1999 revoke and replace the Unfair Terms in Consumer Contracts Regulations 1994. Those Regulations implemented Council Directive 93/13/EEC on unfair terms in consumer contracts (O.J. No. L95, 21.4.93, p. 29). Regulations 3 to 9 of these Regulations re-enact regulations 2 to 7 of the 1994 Regulations with modifications to reflect more closely the wording of the Directive.

The Regulations provide that an unfair term is one which has not been individually negotiated and which, contrary to the requirement of good faith, causes a significant imbalance in the parties' rights and obligations under the contract to the detriment of the consumer.

List of unfair terms

Schedule 2 contains an indicative list of terms which may be regarded as unfair.

These are:

  • excluding or limiting the legal liability of a supplier in the event of the death of a consumer or personal injury to the latter resulting from an act or omission of that seller or supplier;
  • inappropriately excluding or limiting the legal rights of the consumer vis-à-vis the seller or supplier or another party in the event of total or partial non-performance or inadequate performance by the seller or supplier of any of the contractual obligations, including the option of offsetting a debt owed to the seller or supplier against any claim which the consumer may have against him;
  • making an agreement binding on the consumer whereas provision of services by the seller or supplier is subject to a condition whose realisation depends on his own will alone;
  • permitting the seller or supplier to retain sums paid by the consumer where the latter decides not to conclude or perform the contract, without providing for the consumer to receive compensation of an equivalent amount from the seller or supplier where the latter is the party cancelling the contract;
  • requiring any consumer who fails to fulfill his obligation to pay a disproportionately high sum in compensation;
  • authorising the seller or supplier to dissolve the contract on a discretionary basis where the same facility is not granted to the consumer, or permitting the seller or supplier to retain the sums paid for services not yet supplied by him where it is the seller or supplier himself who dissolves the contract;
  • enabling the seller or supplier to terminate a contract of indeterminate duration without reasonable notice except where there are serious grounds for doing so;
  • automatically extending a contract of fixed duration where the consumer does not indicate otherwise, when the deadline fixed for the consumer to express his desire not to extend the contract is unreasonably early;
  • irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract;
  • enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract;
  • enabling the seller or supplier to alter unilaterally without a valid reason any characteristics of the product or service to be provided;
  • providing for the price of goods to be determined at the time of delivery or allowing a seller of goods or supplier of services to increase their price without in both cases giving the consumer the corresponding right to cancel the contract if the final price is too high in relation to the price agreed when the contract was concluded;
  • giving the seller or supplier the right to determine whether the goods or services supplied are in conformity with the contract, or giving him the exclusive right to interpret any term of the contract;
  • limiting the seller's or supplier's obligation to respect commitments undertaken by his agents or making his commitments subject to compliance with a particular formality;
  • obliging the consumer to fulfill all his obligations where the seller or supplier does not perform his;
  • giving the seller or supplier the possibility of transferring his rights and obligations under the contract, where this may serve to reduce the guarantees for the consumer, without the latter's agreement;
  • excluding or hindering the consumer's right to take legal action or exercise any other legal remedy, particularly by requiring the consumer to take disputes exclusively to arbitration not covered by legal provisions, unduly restricting the evidence available to him or imposing on him a burden of proof which, according to the applicable law, should lie with another party to the contract.

Financial services

The Unfair Terms in Consumer Contracts (Amendment) Regulations 2001 brought financial services into the scope of the 1999 regulations.

Supervision and enforcement

  • Department for Business Innovation & Skills (BIS)
  • The Office of Fair Trading (OFT)