UCL FACULTY OF LAWS

2009-10

CONTENTS OF THE CONTRACT

1. Contract Terms

A: WHAT IS A CONTRACTUAL TERM?

1. General Definition: a statement of fact which is intended to create a legal obligation under
the contract i.e. "the price is £10,000”
Terms can be express or implied. They can also be classified as conditions, warranties and
innominate terms (see lectures on performance and breach)

2. Distinguishing terms from mere puffs and representations

Mere puffs: Dimmock v Hallett (1866) 2 Ch App 21

Representations: a statement of fact which induces the other party into the contract i.e. “the
car passed its MOT test first time.”

• Why distinguish between puffs, representations & terms?

• How to distinguish?
Generally looking for intention of the parties, considering the “totality of the
evidence as a whole” assessed using the intelligent bystander test: Heilbut,
Symons v Buckleton [1931] AC 30, 51 per Lord Moulton.
Other helpful factors:
(i) When was the statement made?
(ii) Is the statement important?
(iii) Did the maker of the statement have special knowledge or skill?

Oscar Chess v Williams [1957] 1 All ER 325:

A person sold a car to a car dealer and said it was a 1948 model. They relied on the
car's logbook for this information. Unfortunately the logbook was forged and the car
was in fact a 1939 model. It was held that the statement was a representation and
not a term. Denning reiterates the Heilbut, Symons v Buckleton test re the totality of
the evidence and the use of the intelligent bystander. He stated the statement was an
expression of belief and not a contractual promise.

Dick Bentley Productions v Harold Smith (Motors) Ltd [1965] 2 All ER 65:

Car dealers sold a car to a customer and said it had done 20,000 miles. In fact it had
done 100,000 miles. It was held that the statement as to the mileage of the car was a
term as the maker of the statement had special skill and knowledge compared to the
recipient
3. Oral Statements as Terms when the Contract is Written

The Parole Evidence Rule

• General rule: If the terms of the contract have been reduced to
writing, oral terms cannot be used to vary that: Jacobs v Batavia &
General Plantations Ltd. [1924] 1 Ch. 287

• Exceptions:

o The rule does not apply where it was not the intention of
the parties was that the written contract would contain the
whole of the agreement: Allen v Pink (1838) 150 E.R
1376.

o Collateral contract: City and Westminster Properties v

Mudd [1959] Ch 129

Future of the Rule? See Law Commission’s Report: ‘The Parole Evidence
Rule’ (1980) No. 15

B. INCORPORATION OF TERMS

(i) Incorporation by Signature

L’Estrange v Graucob Ltd [1934] 2 KB 394
Curtis v Chemical Cleaning and Dyeing Co Ltd [1951] 1 KB 805
Grogan v Robin Meredith Plant Hire [1996] CLC 127

(ii) Incorporation by notice

Chapelton v Barry UDC [1940] 1 KB 532
P wished to sit on a deck chair while visiting a sea-side resort. There was a
pile of deckchairs near a wall with a notice saying they were 2d per 3 hour
session. The notice contained no terms, but said the hirer should obtain a
ticket from the attendant. P took 2 chairs, gave the attendant 4d and
received 2 tickets. The ticket contained the following statement: “The
council will not be liable for any accident or damage arising out of the hire
of the chair.’ P’s chair collapsed due to the negligence of D and P was
injured. Is the statement a term of the contract?

*Olley v Marlborough Court Ltd. [1949] 1 KB 532

P & her husband registered at D’s hotel and paid a week’s board and
lodging in advance and then went up to their room. There was a notice in
the room stating: “The proprietors will not hold themselves responsible for
articles lost or stolen, unless given to the manageress for safe custody.”
Owing to the negligence of the hotel staff a thief gained access to the room
and stole several items of jewellery. Is the notice a term of the contract?

Interfoto Picture Library Ltd v Stiletto Visual Programmes

[1989] QB 433
‘onerous’ or ‘unusual’ terms.

*Parker v South Eastern Railways (1877) 2 CPD 416

P deposited his bag in a cloakroom at D’s station. He paid and was given a
ticket. On the face of the ticket, some terms were printed and it also said,
‘see back.’ On the back, there was a clause stating the company would not
be liable for any package exceeding £10.oo in value. A placard to this
effect also hung in the cloakroom. The bag was worth more than £10.00
was stolen and the D wanted to rely on the term.

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 Thornton v Shoe Lane Parking [1971] 1 ALL ER 686
P parked his car in a multi-storey car park owned and operated by D. At
the entry to the car park there was a sign stating the charges and saying
that parking was ‘at the owner’s risk.’ The motorist took a ticket from the
machine and then drove into the car park. The ticket said: “This ticket is
issued subject to the conditions of issue as displayed on the premises.”
Inside were notices of conditions which tried to exclude liability for damage
to vehicles and personal injuries. P was later injured when he collected his
car partly due to his own negligence and partly due to the D’s. Are the
statements in the notices terms of the contract?

(iii) By course of dealing

McCutcheon v David MacBrayne Ltd. [1964] 1 WLR 125

Motours Ltd v Euroball (West Kent) Ltd [2003] EWHC 614
E supplied telephone services to M on terms which were replaced by an
oral agreement. E’s directors signed 14 order forms containing M’s
standard terms and conditions over the 18 month period, but E never read
them, they were never discussed or negotiated between the parties and
they were “very difficult to read” because they were in small light grey print
on coloured paper and in complex language. Are the terms incorporated
into the contract?

C. TERMS IMPLIED INTO THE CONTRACT

(i) Statute
(ii) Custom
(iii) Terms implied by the courts: Liverpool City Council v
Irwin [1976] 2 All ER 39:

The court held that there shall be an implied term in leases that a
landlord shall keep common parts of a building in reasonable care
and in use. In this case tenants rented flats in a block of flats but
the landlord retained control of the lifts and did not repair them.
The court held that even though it was not stated expressly, there
was an implied obligation on the landlord to keep the lifts working
AG of Belize v Belize Telecom [2009[ 1 WLR 7988

(iv)Terms implied in fact

Officious Bystander test: Shirlaw v Southern Foundries

Ltd
[1939] 2 KB 206:
Something so obvious that it goes without saying: "Oh, of course"

Commercial Efficacy test: The Moorcock [1886-90] All

ER 530
to make the contract meaningful commercially:

2. Unfair Contract Terms

A. FAIR v. UNFAIR CONTRACT TERMS

Firstly we have to decide whether it is a breach or whether it is negligence.

Then either use section 2 (restrict or exclude liability) or section 3. Either it
will declare the clause automatically void, or the Act will tell us that the

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clause will be subject to the reasonableness test. (Test is only used if the
act tells us to do so).

1. Why do we need a specific area of law to deal with unfair terms?

2. Defining an unfair term

a. Exemption clauses
b. Unfair terms in consumer contracts

B. EXEMPTION/EXCLUSION CLAUSES

4 questions:
1. Is the clause incorporated into the contract?
2. Does it cover the particular breach of contract?
3. Does the Unfair Contract Terms Act 1977 apply?
4. Is it a consumer contract and how does that alter the analysis?

1. Is the clause incorporated into the contract?

See material above on incorporation of terms and the parole evidence rule.
2. Does the clause cover the breach?

a. Contra Proferentem Rule

Ambiguity in wording construed against person seeking to rely on
the clause and in favour of the other party
Wallis, Son & Wells v Pratt & Haynes [1911] AC 394
“No warranty express or implied”
This is a rule of last resort and is only used in rare cases where
there is true ambiguity:
McGeown v Direct Travel Insurance [2003] EWCA Civ 1606

b. Negligence
*Canada Steamship Lines Ltd v The King [1952] AC 292
a. Does the clause contains language which expressly
exempts a party from liability for his own negligence?
If NO then clause must satisfy BOTH
b. Is the clause wide enough to cover negligence?
c. Can the clause cover something else as well as
negligence?
HIH Casualty and General Insurance Ltd v Chase
Manhattan Bank [2003] UKHL 6

3. Does the UCTA 1977 apply?

a. What does UCTA cover?

(i) s. 26
(ii) Schedule 1
Mitsubishi Corporation v Eastwind Transport Ltd [2005] 1
Lloyds Rep 383

b. Attempted exclusion of liability for negligence

(i) s. 2
(ii) s. 1: definition of negligence for purposes of UCTA
(iii) s. 2(i):
“A person cannot by reference to any contract term or a notice
given to persons generally or to particular persons exclude or
restrict liability for death or personal injury resulting from
negligence.”

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 (iv) s. 2(2):
“In the case of other loss or damage, a person cannot so exclude
or restrict his liability for negligence except in so far as the term or
notice satisfies the requirement of reasonableness.”

c. Attempted exclusion of liability for breach of contract

(i)s.3(1):
“This section applies between contracting parties where
one of them deals as a consumer OR on the other’s
written standard terms of business.”
British Fermentation Products v Compare Reavell Ltd [1999] BLR
352

(ii) s.12: Dealing as a Consumer

*R & B Customs Brokers Ltd. v United Dominions Trust

Ltd. [1988] 1 WLR 321
P bought a car from D, a finance company. P, a private company, bought
the car for the director’s private and business use. The sale contract for the
car included exclusion clauses attempting to exclude the implied terms
from the Sale of Goods Act 1979. The car leaked and the D wanted to rely
on the exclusion clause to exempt it from liability. It could do so as long
as the term was not excluded by the operation of UCTA.

d. Specialist clauses:
(i) s. 6(1) seller’s implied undertaking as to title cannot be
excluded or restricted by a contract term: s.12 Sale of Goods Act
1979 only.
(ii) s. 6(2)(a) seller’s obligation arising from s.13-15 Sale of
Goods Act 197 only cannot be excluded or restricted by a contract
term if buyer a consumer
(iii) s. 6(2)(b) similar obligations are imposed by the
Supply of Goods (Implied Terms) Act 1973
(iv) s. 7(2) consumer contracts of supply other than hire-
purchase.
(v) s.6(3) those statutorily implied undertakings in s.6(2)
can be excluded or restricted against a person NOT dealing as a
consumer but must be reasonable.
(vi) s. 5 consumer guarantees: not for general application,
but specific to written guarantees supplied with goods (e.g.
warranties supplied with televisions etc)

d. Does the clause need to satisfy the

reasonableness test?

Only relevant if the Act specifically states it applies

(i) Definition s. 11 UCTA:
“…that the term shall have been a fair and reasonable one to be
included having regard to the circumstances which were, or ought
reasonably to have been, known to or in the contemplation of the
parties when the contract was made.”

[my input from lecture starts here – previous notes are covered on
a separate document] The reasonableness of the clause is
assessed at the date the contract was made. Therefore, you can

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 have a term that is unreasonable even if the breach is tiny,
because we are interested in the term not the breach.
The burden of proof of proving whether a term is fair or not falls on
the party wishing to rely on it – generally speaking the person
being sued.

What does reasonableness actually mean? – Section 11: ‘fair and

reasonable’ in relation to having regard to the circumstances which
were/should have been known at time of contract formation.

Schedule 2 (of section 11) of the Act can be relied upon if we are
using section 6 and section 7 of the Act. Schedule 2 gives us a list
of criteria to take into account when assessing reasonableness:
(i) Relative strength of the bargaining power of each of the
parties (see Watford Electronics v Sanderson [2001] 1 ALL
ER 696) – the courts will take a much more robust
approach when two business people are involved, i.e.
when 2 business people are involved it is more likely that
the clause will be reasonable.
(ii) Did one party receive an inducement to enter the contract?
i.e. did they receive a reduced price or the like. If they did
get an inducement it’s more likely to be reasonable.
(iii) Was the customer aware of the terms because it is in
common usage in the industry? The more common the
term, the more likely the customer is to be aware of it and
the more likely it is to be reasonable.
(iv) Have the goods been manufactured specially for the
customer? If so, it is likely that the clause will be
reasonable.
Schedule two is only an indicative list it is not all encompassing or
prescriptive.
Schedule 2 is limited in its use to section 6 and section 7 – whilst we will be
mainly relying on section 2 and 3. So how can we assess reasonableness
for these sections? Is there any way to incorporate schedule 2 into any
other sections?

(ii) Problems of Schedule 2

George Mitchell (Chesterhall) v Finney Lock Seeds [1983] 2 AC

803
D was a seed merchant who agreed to supply P (farmers) with 30lbs of
Dutch Winter Cabbage for £192. An invoice that accompanied the seed
when it was delivered contained a clause purporting to limit liability if the
seed was defective to replacing the seed or refunding the price. It then
went on to try and exclude liability “for any loss or damage arising from the
use of any seeds or plants supplied by us and for consequential loss or
damage arising out of such use…or of any other loss or damage
whatsoever.” P bought 63 acres of seeds, but it was unmerchantable and
the crop failed. P claimed compensation for loss of production.

Granville Oil and Chemicals Ltd v Davies Turner & Co Ltd [2003] 1
ALL ER 819 (CA) (above)
Claimant is contracting with freight man to ship some paint to sea.
Defendant arranged insurance for the voyage. Contracts were said
to be subject to a standard term in the British International Freight
Association standard trading conditions. We are concerned with
the limitation clause in clause 30 – which says that the insurer can
only claim if they claim within 9 months of the event. The paint is
damaged in transit and the claimant makes a claim. The claim is
rejected and they are only told about this the day after the 9 month

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period expires. The claimant then sued for breach and the
defendant seeks to rely on the limitation clause (9 month period,
missed by one day). Although going one day over may seem
unreasonable, we are not required to assess this – we are required
to assess the reasonableness at the time the contract was made.
The court held that the defendant could rely on the clause. They
imported all of schedule 2 into the judgment. The court cannot say
we are directly looking at schedule 2, because this is a section 3
claim (not 6 or 7), however, the court did incorporate schedule 2 as
a set of ‘relevant criteria’. The court did not label this as schedule
2, but the factors were very similar. ‘Although schedule 2 only
applies in section 6 and 7, the principles are much broader.’ The
court mainly relied on the fact that this was a contract between to
business parties in the same industry and they could have insured
themselves separately if necessary – they were saving money by
not doing so. The court also felt that 9 months was a reasonable
period of time for this industry.
“(A) Any claim by the Customer against the Company arising in
respect of any service provided for the Customer or which the
Company has undertaken to provide shall be made in writing and
notified to the Company within 14 days of the date upon which the
Customer became or should have become aware of any event or
occurrence alleged to give rise to such claim and any claim not
made and notified as aforesaid shall be deemed to be waived and
absolutely barred except where the Customer can show that it was
impossible for him to comply with this Time Limit and that he has
made a claim as soon as reasonably possible for him to do so.
(B) Notwithstanding the provisions of sub-paragraph (A) above the
Company shall in any event be discharged from all liability
whatsoever howsoever arising in respect of any service provided
for the Customer or which the Company has undertaken to provide
unless suit be brought and written notice thereof given to the
Company within nine months from the date of the event or
occurrence alleged to give rise to a cause of action against the
Company.” Clause 30 of the British International Freight
Forwarders Association (BIFA) Standard Trading Terms 1989.

Per Tuckey LJ para 31:

“The 1977 Act obviously plays a very important role in protecting
vulnerable consumers from the effects of draconian contract terms.
But I am less enthusiastic about its intrusion into contracts
between commercial parties of equal bargaining strength, who
should generally be considered capable of being able to make
contracts of their choosing and expect to be bound by their terms.”

Britvic Soft Drinks v Messer [2002] 2 Lloyds Rep. 368

Per Mance LJ para 24:

“In my judgment it is wholly unreasonable for the supplier of a bulk
commodity such as CO2 for a flood application to seek to exclude
liability for the commodity not being of satisfactory quality or being
unfit for its purpose where that has come about as a result of a
breakdown in the manufacturing process allowing the inadvertent
introduction of a redundant carcinogen.”

What happens if it is determined that the clause is unreasonable?

It is commonly thought that the whole of the clause shall be struck
down. However, there is a principle of construction that allows the
court to take out the bit that is unreasonable and leave the rest if

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 the clause is drafted in separate paragraphs (called blue pencil
test).
If the clause is reasonable and good then you have no claim.
However, if it is unreasonable you rights are unaffected. When
assessing this we have to look at possible outcomes if the clauses
are reasonable/unreasonable.

4. Is the clause a consumer contract? How does this alter the

analysis?

UCTA or Unfair Terms in Consumer Contracts Regulations?

C. UNFAIR TERMS IN CONSUMER CONTRACTS

This is a statutory instrument derived from EU directives. In 1993 the

European Council of Ministers concluded negotiations on Council Directive
93/13/EEC on Unfair Terms in Consumer Contracts. (OJ(1993)L95/29).
These were incorporated into UK law by the Unfair Terms in Consumer
Contracts Regulations 1994 (S.I. 1994/3159) and were later replaced by
Unfair Terms in Consumer Contracts Regulations 1999 (S.I. 1999/2083)
which came into force 1st October 1999. Parliament literally lifted the text
from the European directive and placed it into the UK statutory instrument.
There was no attempt to tidy up the law on unfair terms. Therefore we
have the act running alongside the consumer regulations. This has cause a
lot of mess as the act operates on specific clauses. The regulations
however, are much broader and seek to give the consumer much wider
rights than the act does. Drafting of the regulations: Tightly drafted with a
literal approach. EU directive: product of negotiation of member states,
therefore a compromise of different legislative forms and political ideals.
Therefore we have to look at the purpose behind EU directives more than
with UK legislation. So both scope and way of interpretation is different and
both pieces of legislation run in parallel so it is a mess. There are no
guidelines on which piece of legislation should be used.

1. Scope of the Regulations

a. Scope of the 1999 Regulations

When will the regulations not apply?

(i) The regulations do not apply to the core terms of the contract
(reg. 6, para 2)
(ii)
(i)Reg. 4: term not individually negotiated. Regulation 4 will
only be applied when the two parties are a business and a consumer.
(ii) Reg. 3:
“’Consumer’ means any natural person who, in a contract covered by the
Regulations, is acting for the purposes which are outside his trade,
business or profession.” And who is contracting with a business.

R & B Customs Brokers v United Dominions Trust (as

before)
*R v Newham London Borough Council [2005] 1 QB 37
(CA)
Evans v Cherry Tree Finance [2008] EWCA 331

b. Effect of the Regulations

(i) Reg. 8(i)

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 (ii) Reg. 8(2)

c. What is an ‘Unfair Term’?

(i) Reg. 5(1):

“A contractual term which has not been individually negotiated shall be
regarded as unfair if, contrary to the requirement of good faith, it causes
significant imbalance in the parties’ rights and obligations arising under the
contract, to the detriment of the consumer.”

Elements that need to be shown to see if a term is unfair (under Reg 5(1):

(i) Not been individually negotiated (definition in 5(ii) - Term is

drafted in advance, consumer has no input in the drafting of
the term – this is aimed at standard contracts
(ii) The term must be contrary to the requirement of good faith
(iii) The term must cause significant imbalance between the parties
(iv) The term operates to the detriment of the consumer

(ii) When will Reg. 5 apply?

*DG of Fair Trading v First National Bank Plc [2002] 1 ALL ER 97 (House
of Lords)
First National Bank (FNB) is licensed to carry on consumer credit
business in the UK. It is a major lender and has numerous credit
agreements licensed under existing UK legislation. The Director
General of Fair Trading exercising powers under the Unfair Terms
in Consumer Contracts Regulations 1994 brought an action to
declare one of the clauses of First National Bank’s credit
agreement under Regulation 4 (now Reg. 5) unfair. Condition 4 of
FNB’s terms stated: “The rate of interest will be charged on a day
to day basis on the outstanding balance and will be debited to the
Customer’s account monthly in arrears… Time is of the essence
for making all repayments to FNB as they fall due. If any
repayment instalment is unpaid for more than 7 days after it
became due, FNB may serve a notice on the Customer requiring
payment before the specified date not less than 7 days later. If the
repayment instalment is not paid in full by that date, FNB will be
able to demand payment of the balance on the Customer’s account
and interest outstanding together with all reasonable legal and
other costs, charges and expenses claimed or incurred by FNB in
trying to obtain the repayment of the unpaid instalment of such
balance and interest. Interest on the amount which becomes
payable shall be charged in accordance with Condition 4, at the
rate stated in paragraph D overleaf (subject to variation) until
payment after as well as before any judgment (such obligation to
be independent of and not merge with any judgment.)” Lord
Bingham: ‘a core term is a term that describes the main subject
matter of the contract.’ He says that we should look at the phrase
core term restrictively. Because the wider scope we give to this
term, the more freedom businesses have to escape from contracts
on this ground and this is unfair to the consumer. Reg 6.2a and
6.2b – a core term would be something relating to the price (cost or
renumeration) However, unfair terms Act – applies when one party
deals in the course of business or in standard business.
What does the court mean by the term significant imbalance?
Bingdaddy felt that if the balance was weighted significantly
weighted against our consumer then it would be regarded as
unfair. To determine this we would have to look at the contract as a
whole.

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 What is the difference between reasonableness and good faith?
Reasonableness relates purely to the clause itself whereas good
faith has an element of personal content in it. Good faith: ‘open and
fair dealing’. Good faith requirements:
(i) Clear and legible terms
(ii) No pitfalls or traps
(iii) If the term is disadvantageous to the consumer it should
be very prominent.
(iv) It is important for the seller not to take advantage of the
consumer’s weak position – the courts refer schedule 2 (of
the regulations not the Act)
Good faith has a larger scope that reasonableness. Of course all
assessed at the time the contract was made.

*Bairstow Eves London Central Ltd v Smith [2004] EWHC

263
But note that it will be difficult for a consumer to show that the term was
unfair if they have consulted a professional adviser from the following line
of cases:

*Murkenbeck & Marshall v Harold [2005] All ER 227

*Allen Wilson Shopfitters v Buckingham [2005] EWHC
1165
DGFT v Foxtons [2008] EWHC 1662 & [2009] EWHC 1681

(iii) Schedule 2: indicative list of clauses which could be

regarded as unfair
(iii) Comparison with 1993 Regulations regarding definition of
‘good faith.’
This case related to the interest charges that were imposed for late
payment by an estate agent. Is the increased late payment fee a ‘core
term’? of the contract. The judge held that this was not a core term and
could therefore be subject to the regulations. It is not price directly, it is a
price improvement clause. He said that it is incidental and not a core term.

Morgan J: The test for fairness will be different for when the claim is
brought by the OFT and when it is brought by the consumer. The court will
be much more lenient and more likely to find the term unfair if the
consumer brings the claim.

d. Rule of Construction

Reg. 7:
“If there is doubt about the meaning of a written term, the interpretation
which is most favourable to the consumer shall prevail…”

e. Adequacy of Price/Consideration

Reg. 6(2):
“In so far as it is in plain intelligible language, the assessment of fairness of
a term shall not relate:
(a) to the definition of the main subject matter of the contract, or
(b) to the adequacy of the price or remuneration, as against the
goods and services supplied in exchange.”

f. relevant time to assess fairness?

Reg 6(1): “at the time of the conclusion of the contract”

Bankers Insurance Co Ltd v South [2003] EWHC 380 (QB)

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 OFT v Abbey National [2009] EWCA 116 (Court of Appeal); [2009]
3 WLR 1215 (Supreme Court) – read this case on Lexis!!!!!!!!!!
What is an excluded term? The court brought this case to decide if
unplanned overdraft charges could stand. Are these bank charges
core terms of the contract or not? This was the test case that was
brought to decide the bank charges fiasco. The precedent in these
decisions only relates to whether or not these clauses are core
terms and not to whether they are fair or not. The judgment says
that he doesn’t believe that this is the end and that the fairness of
the issue should be decided upon by parliament. The Supreme
court found that the banking charges were in fact core terms of the
contract. When considering price we are not necessarily looking for
one term, but can be a multiplicity. All the benefits and detriments
that come with a bank account should be looked at as a single
package. Part of the detriment was that the bank could charge for
money that you don’t have.
This is seen as a cross-subsidy: The majority of customers enjoy
free withdrawls, DDs etc. However, the converse of this is that
some people get charged for going over their overdraft limits. This
is therefore a price of entering into a bank account contract.

That was the Supreme court decision. However, CA said that they
are not core terms. Emphasis on the purpose of the directive and
regulations. Lots of references to achademic writing. Should
assess consumer’s thoughts and expectations of the terms and
consumers regard these terms as incidental. Both courts are
looking at the essential bargain between the two parties, however
the CA take a different approach. There is a difference between an
unfair term and a consumer getting treated unfairly.

As a result of the Supreme court judgment we will see more terms

being considered as core terms and therefore falling outside the
scope of the regulations. Therefore, we must use the Act more.

Judgments on OFT Abbey tell us the schedule 2 is a grey list not a black
list – i.e. not definitive.

Regulation 8 – The term is not binding on the consumer if it is found to be

unfair. The contract can carry on, but the term cannot.1

2. Reform?

‘Modern Markets: Confident Consumers’ DTI White Paper (1999)

DTI Consumer Affairs Directorate: ‘Review of the Council Directive
93/13/EEC on Unfair Terms in Consumer Contract’ (22nd February 2001)
Law Commission: ‘Unfair Terms in Contracts: A Joint Consultation Paper’
No. 166 (August 2002)
Beale: “Unfair Terms in Contracts: proposals for reform in the UK” (2004)
27 Journal of Consumer Policy 289.
Collins: “Good Faith in European Contract Law” (1994) 14 OJLS 229
Bright: “Winning the Battle Against Unfair Terms” (2000) 20 LS 329.

1
Either the consumer can bring a claim themselves or the OFT can bring a mass claim. Generally the
OFT claims are the that go up the courts due to costs.

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Further Reading:
Case C237/02 Freiburger Kommunalbauten GmbH Baugesellschaft & Co
KG v Hofstetter [2004] ECR I 3403 (European Court of Justice) explores
the scope of the “significant imbalance” part of the unfairness test from
Regulation 5 of the Unfair Terms in Consumer Contracts Regulations 1999.
The court concludes that because a national court in one member state
finds that a term is unfair, does not necessarily mean that a court in
another member state will come to the same conclusion.

Dr. Fiona Smith

January 2010

Test for consumer – test for regulations – test for fairness

There is a reform proposal for this mixed system, however this has not
moved anywhere to to governments preoccupation with other issues.

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