Misrepresentation, Non-Disclosure and Breach ... - Law Commission

(d) readily available to any person likely to be affected by the contract
term or notice in question. 106
2.92 In other words, a clause that excluded fire cover if the house was unoccupied
might be exempted from review, but only if it were what a consumer would
reasonably expect, and if it were readily available, presented clearly, legible and
expressed in reasonably plain language. If the clause were merely one of the
small print terms, and no special steps had been taken to bring it to the
consumer’s attention, it would no longer be a core term, and a court could review
it to see if it was fair.
2.93 It is not necessarily sufficient for the term to be in plain language. An exception or
other clause defining the risk may be in plain language without necessarily being
clearly presented, or even readily available. The Directive requires that the term
relates to the main subject matter of the contract. It would be difficult to argue that
an exception or definition of which consumers were quite reasonably unaware
defined the main subject matter of the contract. Such a term would therefore be
subject to review for fairness. It does not follow that a court will necessarily treat it
as unfair, but if it is substantially different from what the consumer reasonably
expected and it is not readily accessible, there must be a risk that the court will
hold it to be an unfair term.
2.94 We would add that in practice it is probably necessary to include the exception in
the documentation (the proposal form or descriptive summary of the policy) that
the consumer is given before the contract is made. Merely to include it in the
policy document will not suffice, even if the proposal form or summary refers to
the policy document. Consumers’ reasonable expectations will not be set by
terms they only discovered after entering into the contract. Even if the consumer
received the terms in advance, a term is unlikely to define the main subject
matter of the contract unless it was highlighted in some way. 107
The effect on warranties
2.95 The two limitations that may prevent an exception being a core term apply
equally to a warranty. In the case of warranties, however, there are additional
complications.
2.96 Take the example where the consumer warranted that they would fit a particular
type of mortise lock. The question is whether the term is subject to review, or
whether it is exempt because it “defines the main subject matter of the contract”.
106
Unfair Terms In Contracts (2005) Law Com No 292; Scot Law Com No 199, draft Bill,
clause 14(3).
107 See Zockoll Group Ltd v Mercury Communications Ltd (No 2) [1999] EMLR 385, 395. Also
note UTCCR 1999 Sch 2, Art 1, which includes in the list of terms “which may be regarded
as unfair” terms which have the object or effect of “(i) irrevocably binding the consumer to
terms with which he had no real opportunity of becoming acquainted before the conclusion
of the contract.”
47