Renting Homes: The Final Report - Law Commission

The detail of these fundamental provisions is discussed, in context, below in
Parts 4 to 11.
3.44 Fundamental terms are mandatory statutory provisions and as such are not
subject to the unfair terms regulations. 103
Supplementary terms
3.45 In addition to fundamental provisions, the appropriate authority may prescribe
supplementary provisions. 104 These deal with all the practical matters that one
would expect to find in an occupation contract (for example an obligation on the
part of the contract-holder to pay the rent) but which do not need the same
degree of legislative backing as the fundamental provisions.
3.46 Before prescribing a supplementary provision, the appropriate authority must
have regard to whether, assuming it was incorporated into the contract as a term
without modification, it would be fair for the purposes of the unfair terms
regulations. 105 If the provision is incorporated into the contract unmodified, it will
not be subject to the unfair terms regulations. 106
3.47 The parties are free to agree that a supplementary provision should not be
incorporated as a term. 107 They may also agree to incorporate the provision with
modifications. 108 If they do so, the resulting term may be subject to challenge as
unfair. If the term is held to be void or invalid (under the unfair terms regulations
or for any other reason), the contract is treated as incorporating the provision
without modification. 109
Additional terms
3.48 These are any other express terms of the contract. 110 Additional terms must be
fair and transparent, in accordance with our consumer protection approach.
Model contracts
3.49 For the recommended scheme to work, it is essential that landlords have easy
access to contracts that meet the statutory requirements. This is to be achieved
through the creation of model contracts. Assuming that the terms as regards key
matters are in plain intelligible language, the model contracts are not subject to
the unfair terms regulations.
103
Cl 13 and the Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999 No 2083),
reg 4(2).
104 Cl 21(2), read together with cls 228 and 238. In Renting Homes (2003) Law Com No 284
these were described as “default” terms.
105
Cl 23(2): a provision that was manifestly unfair would be challengeable by way of judicial
review.
106 Cl 23(1).
107 Cl 21(3). In this case the written statement must contain a statement to this effect: cl
25(3)(b). This is to avoid subsequent arguments about whether the term was included in
the agreement or not.
108 Cl 21(4).
109 Cl 23(3).
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