Contracts which come within the scope of the Regulations are open to a test of fairness and any term found to be unfair is ineffective, although the remainder of the contract may, if it is capable of doing so, continue to bind the contract parties. Only a Court can definitively decide if a term is unfair. The Regulations apply to any term which has not been individually negotiated in a contract between a consumer acting outside the course of business and a seller of goods or supplier of services.
Contracts can be oral or written or a mixture of both.
In the case of contracts where all or certain terms are in writing the seller or supplier must ensure that terms are drafted in plain, intelligible language. Where there is doubt about the meaning of a term the interpretation most favourable to the consumer will prevail. Even if a specific term in a contract has been individually negotiated the Regulations could still be applied to the remainder of the contract, provided the contract is not an excluded contract. An indicative and non exhaustive list of terms which may be regarded as unfair are given in the Regulations and are listed in the Appendix below. The fact that a term is included does not necessarily make it unfair any more than the non inclusion of a term guarantees fairness.