Every time consumers buy something we enter into a contract. It could be just a food item from the grocer next door which only costs a few cents, or a brand new car that costs thousands of euros.
Consumer contracts should be written in plain, intelligible language that can be easily understood- Odette Vella
A contract may be made verbally or in writing. Both types of contracts are legally binding. When a contract is presented to us in writing, it is of utmost importance that we take the time to read it carefully and understand it before we agree and sign it.
Reading a contract before signing it gives us the possibility to renegotiate terms and conditions that we may consider inadequate. We also have the opportunity to double check that what we have agreed with the seller is actually included in the contract.
For instance, we should check that the contract features the model or type of product or service ordered, the total cost, how and when the payment is to be made, when a job is to be started or completed, and when goods are to be delivered.
Both parties should make sure that the details of the sale are clearly included in the contract as this may avoid any possible misunderstandings and unnecessary hassles.
Once a contract is signed it becomes legally binding and cannot be cancelled, unless an important term or condition of the contract has been breached by one of the parties.
A case in point would be if a consumer orders a piece of furniture to be delivered in six weeks’ time, and a few days before delivery the consumer is informed that the delivery has been postponed by another six weeks. In such a situation the consumer would have the right to cancel the contract and claim back any money paid.
It could also be the consumer who does not honour the contract, by, for instance, changing his mind about the purchase. In this case, the consumer may lose the deposit paid, or incur a penalty as stipulated in the contract.
Terms and conditions in consumer contracts may also become unenforceable if they are deemed unfair. A contract term is considered unfair if it tries to limit a consumer’s legal right.
Part VI of the Consumer Affairs Act provides a list of contract terms that are considered unfair, among which we find 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 that allow a trader to retain sums paid by the consumer should the consumer cancel the contract, but which prohibit 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 to the value of the goods or services purchased or hired.
A 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 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 had no real opportunity of becoming acquainted with before agreeing to 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 business.
Unfair terms are also those that when enforced are detrimental to consumers.
Furthermore, the unfairness of a term is determined taking into account the nature of the goods and services purchased and also whether consumers were subjected to undue pressure, or their lack of knowledge was improperly taken advantage of.
The law protects consumers from such unfair terms by nullifying the legal consequences of these conditions.
Consumer contracts should also be 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 the meaning of a term, the law provides that the interpretation most favourable to the consumer shall prevail.
customer@timesofmalta.com
odette.vella@gov.mt
Ms Vella is senior information officer, Office for Consumer Affairs, Malta Competition and Consumer Affairs Authority.