Read carefully before you sign

We are often presented with contracts ready to sign upon ordering items, such as a piece of furniture or an appliance, or when subscribing to a service, like internet or telephony.

Sometimes we are also asked to sign terms and conditions included in a commercial guarantee. Unfortunately, before signing these contracts few actually sit down and read every single clause written in them.

Very often, we blindly trust the seller and rely on their assurance that the contract is just a standard procedure. In reality, contracts may differ in many ways and this also applies to standard form contracts.

Therefore, before signing anything we should carefully read each and every clause. Terms and conditions in very small print should be read with extra attention, as the most important information is usually found there.

If when reading standard form contracts we do not fully agree with certain terms and conditions, we should not be afraid to renegotiate the conditions we do not like before finally agreeing to sign.

Prior to signing, we should also double check that what was agreed with the seller is included in the contract.

We should check about the model or type of product or service ordered; the date when this was ordered and when it will be delivered; the deposit paid; and also how the payment will be made.

Even though it is our responsibility to carefully read contract clauses before signing, should we inadvertently sign for any terms that consumer law considers unfair, such terms are legally unenforceable.

A contract term is deemed unfair if it tries to limit our legal consumer rights. The Consumer Affairs Act actually provides a list of contract terms that are considered unfair, among which are 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 which exclude or limit the legal rights of consumers against the trader in the eventuality that the trader does not adhere to the contract agreed on.

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

Moreover, a consumer cannot be requested to pay the trader as compensation a sum that is disproportionately high compared with 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 impose a contract term that allows the seller to change significantly what consumers are buying without giving them the chance to withdraw from the contract.

It is also prohibited to irrevocably bind the consumer to terms with which they had no real opportunity of becoming acquainted with before the conclusion of the contract.

Basically, what consumer law considers unfair are terms and conditions that cause a significant imbalance between consumer rights and obligations and those of the trader.

Unfair terms are also those which, when enforced, are detrimental to consumers. Furthermore, the unfairness of a term is determined by taking into account the nature of the goods and services purchased and also whether consumers were subjected to undue pressure, or lack of knowledge was improperly taken advantage of.

The law protects us from such unfair terms by nullifying the legal consequences of these conditions.

Unfair terms are not binding on consumers. Consumer contracts should also be written in plain and intelligible language that can be easily understood.

Should a term be ambivalent, or any doubt arises about the meaning of a term, the law provides that the interpretation most favourable to the consumer shall prevail.

The protection of consumers against unfair contract terms will also be one of the main responsibilities of the Office for Consumer Affairs within the Malta Competition and Consumer Affairs Authority, which will be set up shortly.

By investigating and eventually curbing unfair trading practices, the new authority does not only aim to better protect consumers’ financial interest but also to promote good business practices.

The stimulation of good trading practices not only builds and strengthens trust between consumers and traders but also generates healthy markets where consumers receive the best possible service and traders see their business grow and flourish.

customer@timesofmalta.com

odette.vella@gov.mt

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