Part 2 of the Consumer Rights Act 2015 protects consumers from unfair contract terms.

This applies to terms in contracts for goods, digital content and services. It includes written terms, online terms and conditions, subscription agreements, cancellation clauses, and standard form contracts.

For a full overview of how the Act works, see Consumer Rights Act 2015 Overview.

What Is an Unfair Term?

A contract term is unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations to the detriment of the consumer.

In plain English, a term is likely to be unfair if:

  • It heavily favours the business.
  • It leaves the consumer at a serious disadvantage.
  • It was not properly brought to the consumer’s attention.
  • It is hidden in small print or unclear wording.

If a term is unfair, it is not legally binding on the consumer; even if the consumer agreed to it.

Terms Must Be Transparent

Contract terms must be:

  • Written in plain, intelligible language.
  • Clear and understandable.
  • Legible.

If a term is unclear, the interpretation most favourable to the consumer will apply.

Important Terms Must Be Prominent

If a term could significantly affect the consumer such as cancellation rules, penalty fees, automatic renewals or price changes — it must be brought to the consumer’s attention in a prominent way.

Burying important terms in lengthy small print is not acceptable.

A trader cannot use contract terms to remove or restrict your statutory consumer rights.

For example, a term stating:

  • “No refunds under any circumstances”.
  • “Sold as seen – no liability accepted”.
  • “We are not responsible for faults”.

will not override your legal protections.

Examples of Potentially Unfair Terms

Terms may be unfair if they:

  • Allow the business to change the price without notice.
  • Prevent cancellation without excessive penalties.
  • Automatically renew a contract without clear warning.
  • Limit liability inappropriately.
  • Allow the trader to decide disputes unilaterally.

Even if a term appears neutral, it can still be unfair depending on how it operates in practice.

What Happens If a Term Is Unfair?

If a court finds a term unfair:

  • The term is not binding on the consumer.
  • The rest of the contract can continue, if capable of doing so.

You do not need to comply with an unfair term.

Enforcement

Unfair terms can be challenged by:

  • The consumer directly.
  • Trading Standards.
  • The Competition and Markets Authority (CMA).

If you believe a business is relying on an unfair term, see What To Do If a Business Enforces an Unfair Term.

You can also report the business to Citizens Advice Consumer Service.

If the matter is not resolved, you may need to send a Letter Before Action before starting court proceedings.

Key Principle

Consumers cannot sign away their basic legal protections. If a term creates a serious imbalance or undermines your statutory rights, it is likely to be unenforceable.