Terms and conditions
What is a consumer contract?
A contract is an agreement between two or more people that is enforceable by law. When you buy products or pay for a service, you enter into a consumer contract with the seller or supplier. Both you and the seller are bound by the terms and conditions of the contract.
Contracts can be made verbally or in writing. Sellers and suppliers are free to set contractual terms, but these terms cannot be unfair or take away your legal rights as a consumer. Contract terms are unfair if they put you at an unfair disadvantage.
Understanding terms and conditions
The terms and conditions set out what you agree to do (for example, pay a certain price) and what you expect the seller to do in return.
Terms and conditions must be written in plain and understandable language. Any ambiguities (where there could be more than one meaning) in a contract term will be interpreted in your favour. The rules are only for contracts between a consumer and a trader (known as B2C transactions).
There are different types of terms explained below.
- Express terms: terms, or direct promises, that are individually agreed between you and the trader (for example, agreeing a price for a good or service if it is not fixed).
- Standard terms or ‘small print’: terms that are already included and you have had no influence over them.
- Core terms: terms that set out the main conditions of the contract or the basic nature of the goods or services (for example, the price).
- Mandatory terms: terms that are required by law or industry regulations.
- Implied terms: these terms are not mentioned but are automatically part of the contract because of consumer law. Products, services and digital content or services must meet certain conditions of quality, performance and durability.
What is an unfair term?
A term is unfair if it gives the seller an unfair advantage over the consumer.
The fairness and transparency tests
The fairness test is the legal test for assessing the fairness of terms. When assessing the fairness of a contract term, the following factors are considered:
- The strength of the bargaining position of the parties
- Whether the consumer was offered an inducement to agree to the term (an inducement could be a payment or a discount)
- Whether you customised your order and the products or services were sold or supplied based on what you asked for
- Whether the seller or supplier has dealt with you fairly and equitably
The term must also be transparent and presented to you in a way you can understand. A term is transparent if it:
- Is written in plain and understandable language
- Is clearly presented
- Brings new or complex terms to your attention
- Clearly explains the cost of the term
It is up to the seller to prove a term is transparent.
The ‘black’ and ‘grey’ lists
The law sets out a list of terms which are always and automatically unfair (the ‘black list’), and terms which may be unfair (the ‘grey list’).
The black list
The ‘black list’ is a list of contract terms that are always and automatically unfair.
The ‘black list’ includes terms that:
- Exclude liability for death or personal injury
- Require you to pay for products or services that were not provided
- Reverse a burden of proof that is on the seller
- Makes you cover the cost of any arbitration
- Gives the seller the exclusive right to interpret a term of the contract
- Gives exclusive jurisdiction to the courts where the seller is based (unless you are also based there)
The grey list
This list does not include every unfair term and in some cases, a term that is included on the list may be fair. Equally, a term which is not on the list, may be found to be unfair if it puts you at a disadvantage.
The ‘grey list’ includes terms that:
- Exclude or limit the seller’s liability if you die or are injured because of an act or omission by the seller
- Impose unequal obligations, for example, you are bound to the contract but the seller is allowed to get out of providing a service
- Exclude or limit your right to compensation if the seller does not deliver
- Allow the seller to keep pre-payments (for example, deposits) if you cancel but does not provide for you to be compensated if the seller cancels
- Give the seller the right to unilaterally change (without your agreement) the terms of the contract without a valid reason
- Make you pay a fee to exercise your legal rights
- Prevent you from getting spare parts or repairs from another seller
- Require you to pay excessive advance payments
- Allow the seller to keep any payment for goods or services to be provided by a third party
Who decides if a term is unfair?
Only the courts can decide whether a term is unfair or not. If you think a term is unfair, and you have been unable to fix the issue with the seller, you can take legal action.
Consumer law also allows authorised bodies to bring court action in the Circuit or High Court against traders who do not comply with the law – see ‘Reporting unfair contract terms’ below.
If the court decides that a contract term is unfair, you will no longer be bound by the term. However, if the unfair term is not an essential element of the contract, the rest of the contract (without the unfair term) will still be legally binding on you and the seller.
Reporting unfair terms
There are authorised bodies who can apply to the courts for a declaration that a particular term is unfair.
If you have a complaint about a seller or supplier using unfair contract terms, you can report the issue to the authorised bodies below.
|Complain to:||About the following contracts:|
|Competition and Consumer Protection Commission (CCPC)||Consumer contracts for a range of goods and services|
|Central Bank of Ireland||Consumer contracts with financial services providers such as banks, financial companies and retail intermediaries.|
|The Commission for Communications Regulations (ComReg)||Consumer contracts in relation to telecommunications, electronic communications, broadcasting transmissions, premium rate services and postal sector.|
Consumer law covering unfair terms
The law on unfair terms is set out in the EU Directive on unfair terms in consumer contracts (93/13/EEC). In Ireland, the European Communities (Unfair Terms in Consumer Contracts) Regulations (as amended) put the EU Directive into national law.
The aim of the law on unfair contract terms is to protect you against the abuse of power by the seller or supplier. It protects against one-sided standard contracts and the unfair exclusion of essential rights in contracts.
Contracts that are not covered
The following contracts are not covered:
- Contracts between one business and another business (B2B transactions) or contracts between one consumer and another consumer (C2C transactions)
- Terms that are required or allowed by law (known as mandatory terms)
- Core terms that set out the price or define the product or service. Core terms must be in clear and understandable language.
Other contracts not covered are those covering:
- Succession rights
- Family law
- Company or partnership formation
The CCPC has a detailed guide to unfair terms and conditions in consumer contracts. You can also read more from Your Europe on unfair contract terms.