Unfair Terms in Consumer Contracts: a new ... - Law Commission

5.7 Second, the Court considered whether the renewal commission was in plain,
intelligible language. The OFT argued that some of the words in the old terms,
such as “associated or connected”, were “vague and undefined” and that the fact
that the clauses were “dotted around” the document obscured them from view. 11
Mr Justice Mann agreed that the phrase “associated or connected” was not in
plain, intelligible language:
In their context their scope would puzzle even lawyers. They are
broad terms of uncertain meaning in this concept. When similar words
are used in statutes they are closely defined (see for example the
Insolvency Act 1986), and rightly so … The point is not that they are
void for legal uncertainty. The point is that they are too vague to be
classed as plain and intelligible. 12
5.8 When Mr Justice Mann considered the new terms, he thought that the
replacement word “nominee” was still “not plain or intelligible enough”.
Furthermore, he thought that, given the way the new contracts were structured,
“the obligation has become somewhat buried”. The result was that it “required
some legal mining to bring it to the surface, and the typical consumer is not a
miner for these purposes”. 13
5.9 Third, Mr Justice Mann considered whether the terms were fair. Applying the
reasoning in First National Bank, 14 he found both the old and new terms to be
unfair. He considered there to be a “significant imbalance” because the amounts
payable were significant, operated adversely to the consumer the more time went
on and because commensurate services were not provided as time went on. 15
Further, he concluded that not enough was done to draw the terms to the
attention of the typical consumer:
So far as expectations are concerned, I think it unlikely that the typical
consumer who has got a tenant for (say) a year’s tenancy, and paid
11% of the rent up-front, would expect a repeat bill in year 2 (and all
years thereafter) unless that point is spelled out to him in some way.
In the absence of that it becomes a trap, or a time bomb. 16
5.10 Mr Justice Mann’s reasoning was very similar to early common law judgments on
incorporation of terms:
11 Above at [61].
12 Above at [62].
13 Above at [74].
14 Whilst First National Bank considered the fairness test in the context of the 1994
Regulations it was accepted that the reasoning also applied under the 1999 Regulations
(Office of Fair Trading v Foxtons Ltd [2009] EWHC 1681 (Ch), [2009] 3 EGLR 133 at [78]).
15 [2009] EWHC 1681 (Ch), [2009] 3 EGLR 133 at [90].
16 Above at [91].
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