Unfair contract terms
We may one day find ourselves complaining to a seller that the goods we ordered were not delivered as promised and when promised.
But to our surprise, the seller may inform us that what we are complaining about is actually in the sales contract we agreed to and signed. At this point, we may be told it was our responsibility to read the contract before signing it.
We may also be told we should have renegotiated anything we did not like in the sales contract before signing it.
Unfortunately, most consumers only read a sales contract when a problem crops up and are desperate to find a way out of it or a solution to the problem. Should we ever find ourselves in such a situation, before accepting whatever the seller tells us about what we or are not entitled to, we should double-check our legal consumer rights.
The Consumer Affairs Act lists a number of terms that are considered unfair, because they create imbalance in the rights and obligations of consumers on the one hand, and of sellers and suppliers on the other.
Unfair contract terms are usually found in standard contracts that are not individually negotiated. Consumer law not only prohibits contract terms that limit consumers’ legal rights, but supplements this by a list of examples of contract terms that may be regarded as unfair.
Among these we find contract terms that exclude or limit the liability of a trader for every possible eventuality; 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 latter does not adhere to the contract agreed with.
Certain terms allowing the trader to keep money paid by the consumer should the latter cancel the contract, while others denying a consumer from requesting com-pensation if it is the trader who cancels the contract are also prohibited.
A consumer cannot be asked to pay an amount of money in compensation to a trader that is disproportionate 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 any obligations. This means that a trader cannot impose a contract term that allows the seller to change significantly what the consumer is buying without giving the latter the chance to withdraw from the contract.
It is also prohibited to irrevocably bind the consumer to terms which the latter had no real opportunity of becoming acquainted with before the conclusion of the contract.
Terms that are found to be unfair, even if accepted and signed for by consumers, are not legally binding.
Hence, the seller cannot oblige us to adhere to terms and conditions that consumer law considers unfair.
The Consumer Affairs Act also requires terms to be drafted in plain and intelligible language and states that if the meaning of contract terms is ambiguous, the interpretation most favourable to the consumer shall prevail.
Even though the law protectsus against unfair contract terms,it is always in our best interestto take precautions before signing a contract.
Our first responsibility is to read carefully whatever we are asked to sign and should take all the time we need.
If there are any clauses we do not understand, or feel that certain clauses are unsuitable to our particular situation, it is important we discuss and clarify these with the seller before concluding the sale.
Should we, however, noticeany unfair clauses after the saleis concluded, we should drawthe attention of the seller to the unfairness of the contract, and if we need to seek redress, we should file a complaint with the Office for Consumer Affairs.
Ms Vella is senior information officer, Office for Consumer Affairs, Malta Competition and Consumer Affairs Authority.