OFT Report on Business Terms

The Office of Fair Trading (OFT) has recently published the results of a market study into consumer contracts. The study was set up to examine how and why contracts may cause difficulties for people, as well as identifying those practices and contract terms which have the potential to cause people the greatest harm and breach consumer protection laws.

Of course very few people read all the small print to a contract and it is inevitable that some businesses will seek to take advantage of this. Customers then of course feel let down if they are suddenly presented with a get-out clause they consider to be unfair which allows the business to escape liability.

It seems that a high proportion of OFT enforcement decisions are centred on contract terms and conditions, which some believe indicates that the present sanctions are not a sufficient deterrent. As the law stands a business can draft their own terms and conditions, and it is for the consumer to prove (either themselves, via legal representation, or through the OFT) that the terms are unfair.

The OFT's findings also suggest there is a good chance the problem of unfair terms is under-reported, as most customers who lose out on small sums often take it on the chin.

There is therefore an argument that the sanctions themselves are not significant enough to be a deterrent to unfairly drafted terms. Others believe that the sanctions are significant enough, and that the problem lies in the OFT only taking enforcement action when they consider there it likely that there will be a significant harm to consumers as a whole as a result of the contractual terms of an agreement. This means there is no guarantee the OFT will become involved in individual cases.



Oliver Kew

Published on 11/03/2011