Under the new Consumer Rights Act 2015, which came into force in October 2015, businesses who deal with consumers need to ensure that any contractual terms are fair. The Competition and Markets Authority (CMA) has prepared a series of ‘at-a-glance’ guides which can be used to assist businesses in understanding what terms are likely to be considered fair and unfair. These guides are aimed primarily at small businesses and operate to try and help them avoid common pitfalls when drafting contractual terms. The guides give basic advice, for instance, that all contractual terms should be “plain and intelligible” and “up-front and open”. There are also summaries on terms which are more likely to be considered contentious and be categorised as unfair, such as cancellation charges.
The guides stress the importance of contracts generally, highlighting to businesses that they are to be viewed as a tool to build up a relationship with a consumer and indicating that if the terms contained within them are not fair, then the terms will not form part of the contract with the consumer. The guides also discredit common myths about contracts like the often cited “It’s written and signed so it’s legal” and “You can hide things in the contractual small print”. It is important to note that these guides do not operate to replace the Consumer Rights Act, but merely highlight the CMA’s view of how it may operate.