Getting firms to change or delete unfair contract terms

Our powers allow us to seek an undertaking from a firm that it will amend or remove an unfair contract term from its future consumer contracts. We can also apply to a court for an injunction to prevent a firm from using or enforcing the term against its existing customers. We also have the power under the Consumer Rights Act 2015 (CRA) to seek an undertaking from a firm or obtain an injunction where a term is not transparent, which means that it has not been expressed in plain and intelligible language or is not legible.

When we consider a contract term is unfair or unclear, we usually write to the firm and ask for their comments on our findings. We may ask the firm to undertake to amend a term, remove it, or make the meaning of the term clearer in its future consumer contracts.

If a firm is not willing to amend their terms, doesn’t give an undertaking, or breaches an undertaking, we can apply to a court for an injunction against the firm to prevent it from using or enforcing the unfair term.

Ultimately, only a court can decide if a contract term is unfair under the Consumer Rights Act 2015 (CRA) or under the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs). In addition, only a court can determine whether a term is unclear, in which case, the meaning most favourable to the consumer will prevail.

When we ask firms not to rely on a term

Where we consider a contract term is unfair, it does not mean that the rest of the contract is void, unless it is unworkable without the unfair term.

In these circumstances, we may ask the firm to undertake not to rely on the term or to remove the term from its future consumer contracts. See our previous undertakings and agreements. For future contracts, a firm will usually amend the term so it’s no longer unfair, or delete it from its contracts.

Once we get an undertaking from a firm, we notify the Competition and Markets Authority (CMA) and details of the undertaking will be published either by us, the CMA or both. 

Where we publish details of an undertaking, this will be on our website. Publication alerts consumers that there is a term in their contract that the firm has agreed not to use for existing customers and/or has amended for future customers.

In most cases, firms cooperate with us and stop using contract terms that we consider to be unfair, without us needing to use formal powers.

We expect firms to consider the undertakings we publish as part of their risk management process, as these undertakings will be potential indicators of the likely attitude of the courts, the FCA, the CMA or other qualifying bodies to the fairness of a term (see UNFCOG 1.5).

When we obtain an injunction

If a firm doesn’t give us an undertaking or breaches an undertaking it has already given us, we may apply to a court for an injunction to prevent it from enforcing the term. In considering whether to apply for an injunction, we will look at the full circumstances of the case, including the actual or potential harm to consumers caused by the term.

Once an injunction is granted, we notify the CMA, who organises publication of the details of the injunction. The FCA may also publish details of the injunction on its website.

Notice to affected consumers

Where a firm has given an undertaking or a court has ruled a term to be unfair, we expect the firm to notify its affected customers and to take other appropriate action.