Unfair Terms in Consumer Contracts Regulations 1999 Flashcards Preview

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Flashcards in Unfair Terms in Consumer Contracts Regulations 1999 Deck (15):
1

UTCCR 1999?

Unfair Terms in Consumer Contracts Regulations 1999

2

UTCCR implemented how? Why?

Implemented the EC Directive on Unfair Terms in Consumer Contracts (93/13 EEC, in 1994) - aim to prohibit use of unfair terms in CC where they haven't been individually negotiated. Purposive approach.

3

Compare UTCCR and UCTA re scope (4)

 UTCCR deal only with contract terms, while UCTA deals also with noncontractual notices.  UTCCR apply only to terms that have not been individually negotiated, while only UCTA s 3(1) is restricted in this way.  UTCCR are restricted to business-to-consumer contracts, while UCTA covers both business-to-business and business-to-consumer contracts. Note also that the definition of consumer is narrower for UTCCR compared with UCTA.  On the other hand, the scope of UTCCR is wider than UCTA in one important respect – UTCCR are applicable to all contractual terms (which have not been individually negotiated) in relevant contracts. UCTA deals almost exclusively with exemption clauses

4

To what type of contracts do UTCCR apply? See Regulation 4(1)

UTCCR cover any contractual term, not just exemption clauses.

5

How do UTCCR define ‘seller or supplier’? See Regulation 3(1).

Any natural or legal person who, in contracts covered by these Regs, is acting for purposes relating to his trade, business or profession, whether publicly owned or privately owned.

6

How do UTCCR define ‘consumer’? See Regulation 3(1).

Narrower definition than UCTA.

7

When will a term be regarded as not having been individually negotiated? What if it has been? See Regulation 5(2).

Where is drafted in advance, and consumer has therefore not been able influence the substance of the term.

8

When will a term be regarded as ‘unfair’? See Regulation 5(1)

A term not individually negotiated if contrary to the requirements of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

9

Where in UTCCR does Regulation 5(5) refer us for an ‘indicative and non-exhaustive list of terms which may be regarded as unfair’?

Schedule 2 of Regs has the list.

A term will be viewed as prima facie ‘unfair’ if it enables the seller or supplier to terminate a contract of indeterminate duration without reasonable notice except where there are serious grounds for doing so (Sch 2(1)(g))

10

Director General of Fair Trading v First National Bank plc [2002], Lord Bingham says re Good Faith:

‘The requirement of good faith in this context is one of fair and open dealing. Openness requires that the terms should be expressed fully, clearly and legibly, containing no concealed pitfalls or traps. Appropriate prominence should be given to terms which might operate disadvantageously to the customer. Fair dealing requires that a supplier should not, whether deliberately or unconsciously, take advantage of the consumer’s necessity, indigence, lack of experience, unfamiliarity with the subject matter of the contract, weak bargaining position or any other factor listed in or analogous to those listed in Schedule 2 of UTCCR. Good faith in this context is not an artificial or technical concept… It looks to good standards of commercial morality and practice.’ (at [17]

11

Director General of Fair Trading v First National Bank plc [2002], Lord Bingham says re Significant Imbalance:

‘The requirement of significant imbalance is met if a term is so weighed in favour of a supplier as to tilt the parties’ rights and obligations under the contract significantly in his favour. This may be by the granting to the supplier of a beneficial option or discretion or power, or by the imposing on the consumer of a disadvantageous burden or risk or duty. The illustrative terms set out in Schedule 2 to UTCCR provide very good examples of terms which may be regarded as unfair; whether a given term is or is not to be so regarded depends on whether it causes a significant imbalance in the parties’ rights and obligations under the contract. This involves looking at the contract as a whole. But the imbalance must be to the detriment of the consumer; a significant imbalance to the detriment of the supplier, assumed to be the stronger party, is not a mischief which the Regulations seek to address’ (at [17])

12

In relation to written terms, what does a seller or supplier have to ensure? See Regulation 7(1).

Must be expressed in plain, intelligible language.

13

What happens if the term is ambiguous? See Regulation 7(2

If any doubt, interpretation most favourable to consumer prevails, (but not under proceedings brought under s 12.

14

What happens if a term is unfair? See Regulation 8(1)

If the unfair term places an obligation on a consumer to do/not do something, it can't be enforced. If it excludes or limits liability for unsatisfactory goods/poor workmanship, the consumer can sue for compensation regardless.

The term shall not be binding on the consumer.

15

What happens to the rest of the contract if a term is unfair? See Regulation 8(2).

The term can be severed from the rest of the contract, so long as remainder survives. Blue Pencil Test - the rest will continue to bind if survives.