Unfair contract terms

Unfair terms in English contract law are regulated under three major pieces of legislation, compliance with which is enforced by the Office of Fair Trading. The Unfair Contract Terms Act 1977 is the first main Act, which covers all contracts that have exclusion clauses. The Unfair Terms in Consumer Contracts Regulations 1999 lays on top further requirements for consumer contracts. The Consumer Protection from Unfair Trading Regulations 2008 concerns certain sales practices.

In the late 20th century, Parliament passed its first comprehensive incursion into the doctrine of contractual freedom in the Unfair Contract Terms Act 1977. The topic of unfair terms is vast, and could equally include specific contracts falling under the Consumer Credit Act 1974, the Employment Rights Act 1996 or the Landlord and Tenant Act 1985. Legislation, particularly regarding consumer protection, is also frequently being updated by the European Union, in laws like the EU Airline Compensation Regulation, or the EU Electronic Commerce Directive, which are subsequently translated into domestic law through a statutory instrument authorised through the European Communities Act 1972 section 2(2), as for example with the Consumer Protection (Distance Selling) Regulations 2000. The primary legislation on unfair contract terms deriving from the EU is the Unfair Terms in Consumer Contracts Regulations 1999. Both UCTA 1977 and UTCCR 1999 cover similar ground and can give rise to concurrent claims. For this reason the Law Commission devised a draft Unfair Contract Terms Bill to unify the two in one document, and make protection for small business explicit, but Parliament has not acted yet.