Unfair Terms in Consumer Contracts Regulations 1999 - Definition of Unfair

Definition of Unfair

Regulation 5(1) defines the principle of unfair:

  • If a contractual term has not been individually negotiated and
  • the term causes significant imbalance in the parties rights and obligations, then
  • the term is contrary to the requirement of good faith.

"Has not been individually negotiated" encompasses terms of which the consumer has not had the opportunity to mould. Terms that have been individually negotiated are outside this regulation, while other contract terms may be within the regulation.

"Causes significant imbalance". For a term to be deemed unfair, this requires the term to be to the detriment of the consumer and benefit the seller or supplier to an excessive degree.

"Contrary to good faith". In the complex case of Director General of Fair Trading v First National Bank, the bank's seemingly unfair interest term was found to be in good faith as the term guarded the bank from a possible situation of receiving no interest defeating their business objective.

Schedule 2 sets out an indicative, non-exhaustive list of terms that would be unfair.

Read more about this topic:  Unfair Terms In Consumer Contracts Regulations 1999

Famous quotes containing the words definition of, definition and/or unfair:

    “One definition of man is “an intelligence served by organs.””
    —Ralph Waldo Emerson (1803–1882)

    “It is very hard to give a just definition of love. The most we can say of it is this: that in the soul, it is a desire to rule; in the spirit, it is a sympathy; and in the body, it is but a hidden and subtle desire to possess—after many mysteries—what one loves.”
    —François, Duc De La Rochefoucauld (1613–1680)

    “I was so sick and faint, so overcome at the brutality of this fiendish sport, that I hardly heard the shouts of “Bravo! bravo!” and the fanfaronade of trumpets.... I do not know which astonished me the most, the strikingly curious, brilliant coup d’oeil, the dexterity of the men, the intrepidity of the animals, the miserable unfair play, or the pleasure of the spectators.”
    —M. E. W. Sherwood (1826–1903)