Consumer contracts: unfair terms and transparency

by Practical Law Commercial

A Practice note that provides guidance on the rules governing fairness and transparency in consumer contracts and notices under the Consumer Rights Act 2015 (CRA). This Practice note explains that for most terms to be binding on a consumer, they must be fair. It outlines the key elements of the fairness test, where a term is considered unfair if it is contrary to the requirement of good faith and causes a significant imbalance in the parties' rights and obligations. This Practice note also details the transparency requirement, meaning terms must be expressed in plain and intelligible language. It discusses the "core exemption" from the fairness test for terms concerning the main subject matter or price, which applies only if those terms are both transparent and prominent. Additionally, this Practice note examines the "grey-list" of potentially unfair terms and those that are banned outright, alongside the consequences of unfairness and the enforcement powers of bodies such as the Competition and Markets Authority (CMA), including under the Digital Markets, Competition and Consumers Act 2024 (DMCCA.