Competition – press release

CMA updates guidance on unfair contract terms

Consumer-facing businesses are being offered help complying with consumer law as the CMA publishes new guidance on unfair contract terms.

The update has been created because of changes to the law in the Consumer Rights Act 2015 (the Act), which will come into force in October this year. The Act brings together and strengthens 2 pieces of legislation that target contract terms and notices which could be used to give businesses an unfair advantage in their dealings with consumers. The Competition and Markets Authority (CMA) has updated its existing guidance, taking account of recent case law on unfair terms.

The new 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’.

Notes for editors

  1. The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law. From 1 April 2014 it took over the functions of the Competition Commission and the competition and certain consumer functions of the Office of Fair Trading, as amended by the Enterprise and Regulatory Reform Act 2013.
  2. For more information on the CMA see our homepage or follow us on Twitter @CMAgovuk, Flickr and LinkedIn.
  3. Enquiries should be directed to Rory Taylor (rory.taylor@cma.gsi.gov.uk, 020 3738 6798 or Simon Belgard (simon.belgard@cma.gsi.gov.uk, 0203 738 6472).