Judicial control of unfair contract terms: the implications of consumer Protection Act

TLDR: The main cause of unfair contract terms is that many businesses use pre-formulated, non-negotiated contract terms and ensure that they are routinely incorporated into their transactions with customers as discussed by the authors.

Abstract: Legal systems throughout the world, our own included, have had to find ways of dealing with the pervasive problem of unfair contract terms. The main cause of the problem, in a nutshell, is that many businesses use pre-formulated, non-negotiated contract terms and ensure that they are routinely incorporated into their transactions with customers. The terms are typically framed so as to be overly protective of the business concerned; to minimise its risks and to exempt it from as much liability as possible. A business derives substantial economic benefits from using standardised terms and will generally adopt a 'take-it-or-leave-it' stance if asked by a customer to make changes to the terms. The customer has the alternatives of not contracting at all or of taking his or her custom elsewhere, but very often going without is simply not feasible and shopping around for better standard terms is a waste of time and effort. For various reasons, customers tend to agree to pre-formulated terms without questioning them or attempting to bring about modifications. Their usual reaction on encountering such terms is to skip the small print and concentrate on the few matters that are negotiable, such as subject-matter, price, payment terms, delivery dates and warranties.