The Competition and Markets Authority (CMA) has published updated guidance on unfair contract terms, aimed at helping businesses make sure that their terms comply with the Consumer Rights Act 2015 (CRA).
The updated guidance follows a consultation launched earlier this year (discussed here) in which the CMA proposed simplifying its existing guidance, whilst making clear that its interpretation of the CRA (and therefore the substantive underpinning of the guidance) was largely unchanged.
The changes are therefore principally aimed at making the guidance more user-friendly, reducing its length whilst retaining detailed advice on how the CRA operates and explaining its various provisions. This includes helpful clarifications on what organisations must do to ensure that terms are fair and transparent, including that:
- terms should be logically organised, grouped under clear and descriptive headings, and written in short, simple sentences; and
- important, onerous, or unusual terms need to be given appropriate emphasis and highlighted in any accompanying or pre-contractual literature.
The guidance also provides particular advice on how businesses can comply with their transparency obligations when contracting digitally, for example by providing contracts in multiple formats, making them accessible on various devices, and “providing information about terms in smaller pieces throughout the consumer journey”. Various updates also account for changes brought about by the Digital Markets, Competition and Consumers Act 2024, including notes on how the new rules on subscription traps and unfair commercial practices may relate to – or overlap with – the law on unfair contract terms.
Finally, the updated guidance provides detailed advice on when potentially unfair terms (those included in the so-called ‘Grey List’ in Schedule 2 to the CRA) are likely to cross the line into being unfair, together with examples of historic enforcement decisions by the Office of Fair Trading.
To read the updated guidance in full, click here.