Dealing with consumers

What should you know about contracts with consumers?

The first thing to remember is that at the heart of contracts between businesses and consumers lies the principle of fairness. The extra regulation that governs consumer contracts is designed to make sure that there is no imbalance in the rights of the parties to the detriment of the consumer – particularly in standard form contracts.

As more businesses – even small ones – deal with consumers remotely, it is increasingly the case that there is no negotiation possible in the formation of a contract. You will have to remember that even if your business is small and operating out of domestic premises, you are subject to the rules about dealing with consumers. Below you will find some useful guidance on how to manage a website through which your consumer dealings might take place.

Whether online or otherwise, contracts with consumers should:

  • be clear – and free from legal jargon;
  • make prominent any terms that are detrimental to the consumer;
  • not contain any terms which contravene the provisions of consumer protection legislation.

Consumer terms and conditions

Consumer protection legislation – especially the Unfair Terms in Consumer Contracts Regulations 1999 – sets out the terms (or kinds of terms) which are not permissible in contracts with consumers. Some apply to all contracts with consumers and others apply only to terms that have not been individually negotiated. This means that standard terms and conditions need to be carefully drafted, as it is unlikely that a consumer will be able to negotiate these. You can use our drafting tool to draft terms and conditions for selling to consumers online and get the best contract.

As a general guide (and not an exhaustive list), you should give careful consideration to any provision which may:

  • limit or exclude your liability to a consumer;
  • have a detrimental effect on the consumer;
  • impose disproportionate penalties or unreasonable deadlines on consumers;
  • give you discretion to change the contract without the consumer’s consent; or
  • give you a significantly more advantageous position than the consumer under the contract.

If your contract includes provisions which create a significant imbalance in the rights of the parties to the detriment of the consumer, consider whether they comply with the various consumer protection regulations. Seek independent legal advice if you are unsure, as such provisions may be unenforceable if included in a contract. Or read the government advice on the regulations

Read through the key questions you should ask yourself when dealing with consumers.

Keep it simple…

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