Unfair Terms in Consumer Contracts: Advice to ... - Law Commission

THE LAW COMMISSION
AND
THE SCOTTISH LAW COMMISSION
UNFAIR TERMS IN CONSUMER CONTRACTS:
Advice to the Department for Business,
Innovation and Skills
SUMMARY
S.1 For many years, the law on unfair contract terms has been criticised for its
complexity. It is set out in two separate pieces of legislation:
(1) The Unfair Contract Terms Act 1977 (UCTA) focuses on exclusion
clauses. It applies to a broad range of contracts, including those made
between businesses and between businesses and consumers.
(2) The Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR) 1
implement the Unfair Terms Directive 1993 (UTD). 2 They apply only to
contracts between businesses and consumers, but cover a greater
variety of non-negotiated terms. Terms may be challenged not only by
consumers but by 12 designated enforcement bodies.
S.2 In 2005 the Law Commission and Scottish Law Commission published a joint
Report on Unfair Terms. 3 We recommended a single harmonised regime to
replace both UCTA and the UTCCR.
S.3 In May 2012, the Department for Business, Innovation and Skills (BIS) asked the
two Law Commissions to review and update this Report in so far as it affects
contracts made between businesses and consumers. We were also asked to
consider one particularly controversial area: namely the exemption for main
subject matter and price currently set out in Regulation 6(2) of the UTCCR.
S.4 In July 2012 we published an Issues Paper seeking views and received 58
responses. 4 The responses showed strong support for reform.
1 SI 1999 No 2083.
2 Council Directive 93/13/EEC of 5 April 1993, OJ 1993 L 95.
3 Unfair Terms in Contracts (2005) Law Com No 292; Scot Law Com No 199.
4 Unfair Terms in Consumer Contracts: a new approach? (July 2012), A Joint Issues Paper
by the Law Commission and the Scottish Law Commission.
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