Contractual terms and conditions

Purchasing a product or service very often entails signing some form of agreement with the supplier. It is mostly in the interest of consumers to check out the terms and conditions of these contracts, paying particular attention to the clauses that are usually in very small print.

In actual fact, should a dispute arise over a clause in a contract, the trader most probably will tell you, "You should have read the contract". Very often, most of us assume good faith and rely on the seller's assurance.

However, complaints regarding minimum term clauses in mobile phone contracts, no-refund deposits, as well as the use of exclusion or indemnity clauses is proof that this can be a false assumption.

It is therefore important to check out that what has been agreed on is actually on the contract, for instance, the model or type of product/service ordered, the date when this was ordered and when it is meant to be delivered.

In case of services, it is also important to check out the cost of terminating the service, especially when this is done prematurely, i.e. before the contract expires. Payment details should also be given extra attention.

Even though it is our responsibility to carefully read any document before signing it, should we sign for any terms that the law considers unfair, then such terms are legally unenforceable. A contract term is deemed unfair if it tries to limit our legal consumer rights.

The Consumers Affairs Act provides a list of terms that are considered unfair. Among these we find contract terms that exclude or limit the liability of a trader for every possible eventuality; terms that establish an unreasonably short period for notifying the trader of any defects; or others that exclude or limit the legal rights of consumers against the trader in the eventuality that the latter does not adhere to the agreed contract.

Terms that allow the trader to retain sums paid by the consumer, should the consumer cancel the contract - but the consumer is prohibited from requesting compensation if it is the trader who cancels the contract - are also prohibited.

Consumers cannot be requested to pay to the trader as compensation a sum that is disproportionately high to the value of the goods or services purchased or hired. The consumer cannot be prohibited from cancelling the contract if the trader fails to fulfil his obligations.

This means that a trader cannot have a term that allows the seller to significantly change what the consumer is buying without giving the consumer the chance to withdraw from the contract. It is also prohibited to irrevocably bind the consumer to terms with which he or she had no real opportunity of becoming acquainted with before the conclusion of the contract.

The law protects us from such unfair terms by nullifying the legal consequences of these conditions. Contracts should be written in plain and intelligible language. Should a term be ambivalent or doubtful, the law provides that the interpretation most favourable to the consumer shall prevail.

Here are some points to bear in mind before signing:

• Take the time to read through the terms and conditions. Take it away if necessary. It is your right to have reasonable opportunity to familiarise yourself with the contractual terms before signing.

• Take particular note of clauses in relation to tie-ins, notice periods and cancellation penalties.

• If you are unsure about anything, ask for full clarification.

• A contract is a two-way process. Do not be afraid to ask certain clauses to be struck out if they seem unreasonable.

Ms Vella is senior information officer, Consumer and Competition Division.

customer@timesofmalta.com, odette.vella@gov.mt