Consumers are sometimes asked to sign a contract which may contain terms and conditions that are legally considered unfair.

The unfairness of a term is usually determined by the fact that it gives the trader an unfair advantage over the consumer, or it tries to diminish or take away the consumer’s legal rights. When such terms are included in contracts, these are legally unenforceable even if consumers have inadvertently signed for the clauses.

The Consumer Affairs Act provides a list of contract terms that are legally considered unfair. Among these we find terms that try to prevent consumers from carrying out their legal rights when the seller is at fault, such as when the services or goods ordered are not delivered by the agreed date or are not as agreed with in the contract of sale. In such situations, consumers have the right to cancel the contract of sale and no contract clause can take away this right.

Other unfair terms include those that allow the trader to retain sums paid by the consumer should the consumer decide to cancel the contract, but the consumer is prohibited from requesting compensation if it is the trader who cancels the contract.

Moreover, a consumer cannot be requested to pay to the trader a sum disproportionately high to the value of the goods or services purchased or hired.

Terms that exclude or limit the liability of a trader for every possible eventuality are also legally unfair. It is also prohibited to irrevocably bind consumers to terms that were ‘hidden’ to consumers until after signing the contract.

An unfair term in a consumer contract does not nullify an entire contract. It becomes ineffective and the rest of the contract is normally valid unless the contract is unworkable without that term.

Besides nullifying the legal consequences of unfair terms, the Consumer Affairs Act also specifically requires that consumer contracts are written in plain and intelligible language that can be easily understood by the average consumer. Should a term be ambivalent, or any doubt arises about its meaning, the law provides that the interpretation most favourable to the consumer will prevail.

When consumers have a dispute with traders about unfair contract terms, or do not agree on interpretation or enforcement, before giving up or getting engaged into an endless dispute, consumers may contact the Office for Consumer Affairs at the Malta Competition and Consumer Affairs Authority to verify whether the contract term is unfair and, if so, be guided how to proceed.

The Office for Consumer Affairs has the authority to take the necessary legal actions and thus have unfair terms removed from contracts.

odette.vella@mccaa.org.mt

Odette Vella is senior information officer, Office for Consumer Affairs, Malta Competition and Consumer Affairs Authority.

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