Unfair Terms Definition
Consumer Rights Act
PART 6
Unfair terms in consumer contracts
Chapter 1
Interpretation and application (Part 6)
Interpretation (Part 6)
126. (1) In this Part—
“authorised body” means—
(a) the Competition and Consumer Protection Commission,
(b) the Central Bank of Ireland,
(c) the Commission for Communications Regulation,
(d) the Consumers’ Association of Ireland, being the association of that name whose purpose is to promote and protect the interests of consumers, or
(e) such other person as may be prescribed;
“consumer contract” means any contract between a consumer and a trader.
(2) Any reference in this Part to a term of a consumer contract includes a reference to a term, condition or specification (howsoever described) which governs, or purports to govern, the contractual relationship between the trader and consumer.
Application (Part 6)
127. (1) Subject to subsections (2) to (6) and section 140 (2)(b), this Part applies to a consumer contract that is concluded on or after the day on which this section comes into operation.
(2) A consumer contract is not excluded from the application of this Part by reason only that—
(a) the consumer contract or a term of the consumer contract has been individually negotiated between the trader and the consumer, or
(b) the consumer does not pay a price under the contract.
(3) This Part does not apply to a term of a consumer contract that reflects—
(a) mandatory statutory or regulatory provisions, including rules that, according to law, apply between the contracting parties on the basis that no other rules or arrangements have been established, or
(b) the provisions or principles of international conventions to which the State or the European Union is party.
(4) This Part does not apply to—
(a) a contract of employment,
(b) a contract relating to succession rights,
(c) a contract relating to rights under family law, or
(d) a contract relating to—
(i) the incorporation and organisation of a company, or
(ii) the creation and organisation of a partnership.
(5) If—
(a) the law of a country or territory other than an EEA State is chosen by the parties to be applicable to a consumer contract, and
(b) that contract has a close connection with the State,
this Part shall apply to the contract despite that choice.
(6) Regulation (EC) No. 593/2008 of the European Parliament and of the Council of 17 June 200817 on the law applicable to contractual obligations (Rome I) applies where—
(a) the applicable law has not been chosen by the parties to the contract, or
(b) the law of an EEA State is chosen (other than an EEA State that has chosen not to be bound by that Regulation).
(7) In this section—
“EEA Agreement” means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by all subsequent amendments to that Agreement;
“EEA State” means a state which is a contracting party to the EEA Agreement.
Application of Part in relation to implied term of consumer contract
128. No term may be implied into a consumer contract that would be unfair in accordance with this Part if it were an express term of such a contract.
Chapter 2
Unfair terms in consumer contracts
Unfair term not binding
129. (1) An unfair term of a consumer contract is not binding on the consumer.
(2) Subsection (1) does not prevent the consumer from relying on the unfair term if the consumer chooses to do so.
(3) If a consumer contract is capable of continuing in existence without the unfair term, it shall continue to bind the parties.
Meaning of “unfair”
130. (1) A term of a consumer contract is unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer.
(2) In assessing whether a term of a consumer contract is unfair, the following matters shall in particular be taken into account—
(a) the nature of the subject matter of the consumer contract,
(b) whether the term of the consumer contract complies with the requirements referred to in section 134 (2),
(c) all of the circumstances relating to the conclusion of the consumer contract, and
(d) the other terms of the consumer contract or of any other contract (including a consumer contract) on which it is dependent.
(3) In assessing whether a term of a consumer contract complies with the requirement of good faith, regard shall be had in particular to—
(a) the strength of the bargaining positions of the parties,
(b) whether the consumer had an inducement to agree to the term,
(c) whether the goods were, or the digital content, digital service, service or other subject matter of the contract was, sold or supplied to the special order of the consumer, and
(d) the extent to which the trader has—
(i) dealt fairly and equitably with the consumer, and
(ii) taken the consumer’s legitimate interests into account.
(4) Nothing in this section affects the operation of the following provisions:
(a) section 39 (exclusion or limitation of liability of trader ( Part 2 ));
(b) section 71 (exclusion or limitation of liability of trader ( Part 3 ));
(c) section 94 (restriction on exclusion or limitation of liability of trader ( Part 4 ));
(d) section 132 (consumer contract terms that are always unfair).
Exclusion from assessment for unfairness
131. (1) Subject to subsections (2) to (4), a term of a consumer contract shall not be assessed for unfairness under section 130 to the extent that—
(a) it specifies the main subject matter of the contract and lays down the essential obligations under it, or
(b) it relates to the adequacy of the price or remuneration payable under the contract as against the goods, digital content, digital service, service or other subject matter of the contract supplied in exchange for such price or remuneration.
(2) A term of a consumer contract is excluded from assessment for unfairness under section 130 only if it is transparent in accordance with section 134 .
(3) The reference in subsection (1)(b) to the price or remuneration payable under the contract does not include—
(a) a payment that is incidental or ancillary to the price or remuneration payable under the contract for the goods, digital content, digital service, service or other subject matter of the contract supplied in exchange for such price or remuneration, or
(b) a payment that is contingent on whether a particular event occurs or not.
(4) Subsection (1) does not apply to a term of a consumer contract that is presumed to be unfair under section 133 (1).
Consumer contract terms that are always unfair
132. (1) Subject to subsections (2) and (3), a term of a consumer contract shall always be unfair if its object or effect is—
(a) to exclude or limit the liability of a trader for the death of or personal injury to a consumer arising from an act or omission of the trader,
(b) to require a consumer to pay for goods that have not been delivered or digital content, a digital service or a service that has not been supplied,
(c) to impose on a consumer a burden of proof that, according to the applicable law, would otherwise be on a trader,
(d) to exclude or hinder a consumer’s right to take legal action or exercise a legal remedy, including by requiring the consumer to take a dispute to an arbitration procedure that is not governed by law,
(e) to require a consumer to bear his or her own costs in respect of any arbitration,
(f) to give a trader the exclusive right to determine whether goods are, or digital content, a digital service or a service is, in conformity with the contract,
(g) to give a trader the exclusive right to interpret any term of the contract,
(h) to grant the trader a shorter notice period to terminate the contract than the notice period required of the consumer, or
(i) to confer exclusive jurisdiction for disputes arising under the contract on a court in the place where a trader is domiciled unless the consumer is also domiciled in that place.
(2) Subsection (1)(a) does not apply—
(a) to a consumer contract in so far as it is a contract of insurance, including a contract to pay an annuity on human life, or
(b) to a consumer contract so far as it relates to the creation or transfer of an interest in land.
(3) Subsection (1)(a) does not apply to the liability of an occupier of premises to a person who obtains access to the premises for recreational purposes if—
(a) the person suffers loss or damage because of the dangerous state of the premises, and
(b) allowing the person access for recreational purposes does not relate to the occupier’s trade, business, craft or profession.
(4) Subsection (1)(a) does not affect the validity of any discharge or indemnity given by a person in consideration of the receipt by that person of compensation in settlement of any claim that the person has.
(5) For the purposes of subsection (1)(a), a consumer shall not be deemed to have voluntarily accepted any risk merely because he or she agreed to or knew about a term of a consumer contract that purported to exclude the trader’s liability for death or personal injury.
(6) In this section, “personal injury” has the same meaning as it has in the Civil Liability Act 1961 .
Consumer contract terms presumed to be unfair
133. (1) Part 1 of Schedule 5 contains an indicative and non-exhaustive list of terms of consumer contracts that shall be presumed to be unfair for the purposes of this Part.
(2) Part 1 of Schedule 5 is subject to the provisions of Part 2 of that Schedule.
(3) Subject to section 131 , a term of a consumer contract referred to in Part 1 of Schedule 5 may be assessed for unfairness under section 130 .
(4) The Minister may by regulations specify further terms of consumer contracts that shall be presumed to be unfair for the purposes of this Part.
(5) The Minister may make regulations under subsection (4) only where the Minister is satisfied, after consultation with such persons as the Minister considers appropriate, that it is necessary in the interests of consumer protection and fair competition to do so.
Consumer contract terms to be transparent
134. (1) A trader shall ensure that the terms of a consumer contract are transparent.
(2) A term of a consumer contract is transparent if—
(a) the term is expressed in concise, plain and intelligible language,
(b) in the case of a term that is in writing, the term is legible and presented clearly,
(c) the term is made available to the consumer in a manner that gives the consumer a reasonable opportunity to become acquainted with it before the conclusion of the contract, irrespective of whether or not such an opportunity is availed of,
(d) in the case of a term that is novel or onerous, the term has specifically been brought to the consumer’s attention in such a way that the average consumer would be aware of the term,
(e) any costs or other financial consequences deriving from the term would be comprehensible to the average consumer, and
(f) the term complies with such other requirements as may be prescribed.
(3) In assessing the transparency of a term of a consumer contract, the following matters shall in particular be taken into account—
(a) the nature of the subject matter of the contract,
(b) the means by which the contract is communicated and presented to the consumer,
(c) the other terms of the contract or of any other contract on which it is dependent,
(d) compliance with any obligations relating to the provision of information to the consumer imposed by an enactment (including this Act) which require to be complied with before the conclusion of the consumer contract, and
(e) all the circumstances relating to the conclusion of the contract.
(4) In case of dispute, it shall be for the trader to show that a term of a consumer contract is transparent.
(5) If a consumer contract is directed at a particular group of consumers, any reference to the average consumer shall be read as a reference to the average member of that group.
(6) Before making regulations under subsection (2)(f) the Minister shall consult such persons as he or she considers appropriate.
(7) In this section—
“novel”, in relation to a term of a consumer contract, means a term which may be considered new or original by reference to existing or established market practice in the relevant sector or industry;
“the average consumer”, subject to subsection (5), means a consumer who is reasonably well-informed, reasonably observant and circumspect.
Interpretation of term of consumer contract
135. (1) Where there is doubt about the meaning of a term of a consumer contract, the interpretation that is most favourable to the consumer shall prevail.
(2) Subsection (1) shall apply to the interpretation of a term in proceedings on an application to a court for a declaration or injunction under section 137 .
Duty of court to consider whether term of consumer contract unfair
136. (1) In proceedings before a court relating to a term of a consumer contract, the court shall determine whether the term is unfair irrespective of whether a party to the proceedings has raised that question or indicated an intention to raise it.
(2) Subsection (1) shall not apply unless the court considers that it has before it sufficient legal and factual material to enable it to determine whether the term is unfair.
Application to court for declaration or injunction
137. (1) On an application by an authorised body for a declaration that a term of a consumer contract is unfair, the court may make an order—
(a) declaring that the term of the consumer contract is unfair,
(b) prohibiting the use or continued use in any consumer contract of such a term or similar terms of like object or effect, and
(c) imposing such other conditions as it considers appropriate, including in particular—
(i) a requirement that the trader publish a corrective statement, at the trader’s own expense and in any manner the court considers appropriate, in respect of the matter which is the subject of the order, or
(ii) a requirement that the trader provide to each consumer who is party to the contract to which the order relates an amended contract which does not contain the term which has been declared to be unfair.
(2) On an application by an authorised body for a declaration as to the proper interpretation of a term drawn up for general use as a term of a consumer contract, the court may make such a declaration.
(3) Before making an application under subsection (1) or (2), an authorised body shall cause to be published—
(a) in Iris Oifigiúil and at least two national newspapers, and
(b) in such other manner as the court may direct,
notice of intention to apply to the court for a declaration under the subsection concerned.
(4) An authorised body may apply for an injunction (including an interim injunction) against any trader using, or recommending the use of, a term which the authorised body considers to be an unfair term.
(5) Where an application is made under subsection (4), the court may grant an injunction on such terms, including conditions referred to in subsection (1)(c), as it considers appropriate.
(6) An injunction granted pursuant to subsection (4) may relate not only to the use of a particular contract term but to any similar term, or a term having like effect, used or recommended for use by any trader.
(7) In the exercise of its jurisdiction under subsection (1), (2) or (5) the court shall take account of all the interests involved and in particular the public interest in the protection of consumers.
(8) Every person claiming to have an interest in an application under subsection (1) or (2) shall be entitled to appear before and to be heard by the court on the hearing of the application.
(9) An application under subsection (1), (2) or (4) by an authorised body, other than the Competition and Consumer Protection Commission, shall be on notice to the Commission.
(10) On any application under subsection (1), (2) or (4) it shall not be necessary for an authorised body to prove—
(a) probable loss or damage,
(b) actual loss or damage, or
(c) recklessness or negligence on the part of the trader.
(11) Subsections (1), (2) and (4) are without prejudice to the right of a consumer to rely upon the provisions of this Part in any case before a court of competent jurisdiction.
(12) An application under this section to the Circuit Court shall be made to the judge of the Circuit Court for the circuit in which the trader is ordinarily resident or carries on any profession, trade or business.
(13) In this section, “court” means—
(a) the High Court, or
(b) the Circuit Court.
Transfer from Circuit Court to High Court
138. (1) If, in relation to an application under section 137 to the Circuit Court, that court becomes of the opinion, during the hearing of the application, that it is not appropriate for the Circuit Court to deal with the application, it may, if it so thinks fit, transfer the application to the High Court.
(2) Subsection (1) is without prejudice to the jurisdiction of the Circuit Court to determine an application under section 137 which, at the time of the making of the application, it was satisfied it had jurisdiction to deal with.
(3) Where an application is transferred to the High Court under subsection (1), the High Court shall be deemed to have made any order of a procedural nature that was made by the court from which it was transferred in the proceedings relating to the application.
Publication of order made by court under section 137(1)
139. (1) Subject to subsection (3), where a court makes an order under section 137 (1) declaring that a term of a consumer contract is unfair—
(a) the authorised body that made the application for the order, and
(b) where it did not make the application for the order, the Competition and Consumer Protection Commission,
shall publish, before the expiration of the period specified in subsection (2), a copy of the order on its website.
(2) The period referred to in subsection (1) is the period of 90 days beginning on—
(a) where no appeal is brought against the order made under section 137 (1), the day on which the period for bringing an appeal expires, or
(b) where such an appeal is brought, the day on which the appeal is finally determined or is withdrawn or abandoned.
(3) Subject to subsection (5), where the authorised body and, where it did not make the application for the order, the Competition and Consumer Protection Commission, consider that it would be—
(a) in the interests of consumer protection, or
(b) necessary in order to comply with a legal or regulatory requirement,
they may, instead of publishing a copy of the order as required by subsection (1), publish in such form and manner as they consider appropriate a notice that sets out the term of a consumer contract that the court has declared to be unfair, without disclosing information specified in subsection (4).
(4) The information referred to in subsection (3) is—
(a) information that would identify the parties, and
(b) where subsection (3)(b) applies, information that is not permitted to be disclosed under that legal or regulatory requirement.
(5) Where subsection (3) applies, both the authorised body and, where it did not make the application for the order, the Competition and Consumer Protection Commission shall publish the same notice.
Offence
140. (1) This section applies where an authorised body—
(a) publishes under section 139 (1) a copy of an order under section 137 (1) declaring that the term of a consumer contract to which the order relates is unfair, or
(b) publishes a notice under section 139 (3) setting out that term.
(2) Where, after the date on which the authorised body publishes an order or notice in respect of which this section applies, a trader—
(a) enters into a consumer contract containing the term to which the order or notice, as the case may be, relates, or
(b) seeks to rely on that term in a consumer contract (whenever concluded),
the trader commits an offence.
SCHEDULE 5
Part 1
Contract terms presumed unfair
1. A term which has the object or effect of inappropriately excluding or limiting the legal rights of the consumer in relation to the trader or another party in the event of total or partial non-performance or inadequate performance by the trader of any contractual obligations, including the option of offsetting a debt owed to the trader against any claim which the consumer may have against the trader.
2. A term which has the object or effect of making an agreement binding on the consumer whereas the supply of a service by the trader is subject to a condition whose realisation depends on the trader’s will alone.
3. A term which has the object or effect of permitting the trader to retain sums paid by the consumer where the consumer decides not to conclude or perform the contract, without providing for the consumer to receive compensation of an equivalent amount from the trader where the trader is the party cancelling the contract.
4. A term which has the object or effect of requiring that, where the consumer decides not to conclude or perform the contract, the consumer must pay the trader a disproportionately high sum in compensation for goods, digital content, a digital service which have not been supplied.
5. A term which has the object or effect of requiring any consumer who fails to fulfil his or her obligations under the contract to pay a disproportionately high sum in compensation.
6. A term which has the object or effect of authorising the trader to dissolve the contract on a discretionary basis where the same facility is not granted to the consumer, or permitting the trader to retain the sums paid for goods, digital content, a digital service or a service not yet delivered or supplied by the trader, where it is the trader who dissolves the contract.
7. A term which has the object or effect of enabling the trader to terminate a contract of indeterminate duration without reasonable notice except where there are serious grounds for doing so.
8. A term which has the object or effect of permitting a trader, where the consumer has cancelled the contract, to retain a payment which, had the contract been performed, would have been paid to a third party in accordance with a contractual obligation or a mandatory statutory or regulatory provision.
9. A term which has the object or effect of automatically extending a contract of fixed duration where the consumer does not indicate otherwise, when the deadline fixed for the consumer to express a desire not to extend the contract is unreasonably early.
10. A term which has the object or effect of irrevocably binding the consumer to terms with which the consumer had no real opportunity of becoming acquainted before the conclusion of the contract.
11. A term which has the object or effect of enabling the trader to alter the terms of the contract unilaterally without a valid reason which is specified in the contract.
12. A term which has the object or effect of enabling the trader to alter unilaterally without a valid reason any characteristics of the goods, digital content, digital service or service to be delivered or supplied.
13. A term which has the object or effect of giving the trader the discretion to decide the price payable under the contract after the consumer has become bound by the contract, where no price or method of determining the price has been agreed with the consumer before the consumer becomes bound.
14. A term which has the object or effect of providing for the price of goods, digital content, a digital service or a service to be determined at the time of delivery or supply, or permitting a trader to increase the price of goods, digital content, a digital service or a service without giving the consumer the right to cancel the contract if the final price is too high in relation to the price agreed when the contract was concluded.
15. A term which has the object or effect of limiting the trader’s obligation to respect commitments undertaken by the trader’s agents or making the trader’s commitments subject to compliance with a particular formality.
16. A term which has the object or effect of obliging the consumer to fulfil all of his or her obligations where the trader does not perform the trader’s obligations.
17. A term which has the object or effect of giving the trader the possibility of transferring the trader’s rights and obligations under the contract, where this may serve to reduce the guarantees for the consumer, without the consumer’s agreement.
18. A term which has the object or effect of requiring a consumer to pay a fee in order to exercise a statutory right.
19. A term which has the object or effect of preventing, without a valid reason, the consumer from obtaining repairs or spare parts from another trader.
20. A term which has the object or effect of imposing disproportionate formal or other requirements where the consumer wishes to terminate the contract, whether for the purposes of switching to another trader or otherwise.
21. A term which has the object or effect of requiring from the consumer excessive advance payments or excessive guarantees of the performance of future obligations.
22. A term which has the object or effect of unduly restricting the evidence available to the consumer in respect of the performance of the contract.
23. A term which requires a consumer to restrict his or her rights as a data subject under the Data Protection Acts 1988 to 2018 or the General Data Protection Regulation (Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 201620 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation)).
24. A term specified in any regulations made under section 133 (4).
Part 2
Restrictions on application of Part 1
1. Term 7 (cancellation of contract without reasonable notice) does not include a term of a consumer contract by which a supplier of financial services reserves the right to terminate unilaterally a consumer contract of indeterminate duration without notice where there is a valid reason, provided that the supplier of financial services is required to inform the consumer and any other contracting party of the cancellation immediately.
2. Terms 11 (alteration of contract terms without valid reason) and 13 (determination of price after consumer bound by contract) do not include a term of a consumer contract whereby a supplier of financial services reserves the right to alter the rate of interest payable by or due to the consumer, or the amount of other charges for financial services payable by the consumer where there is a valid reason for doing so, provided that the supplier is required to inform the consumer and any other contracting party or parties of the alteration at the earliest opportunity and the consumer is free to dissolve the contract immediately.
3. Terms 11 (alteration of contract terms without valid reason) and 13 (determination of price after consumer bound by contract) do not include a term under which a trader reserves the right to alter unilaterally the conditions of a contract of indeterminate duration provided that the trader is required to inform the consumer of the alteration with reasonable notice and the consumer is free to dissolve the contract.
4. Terms 7 (cancellation of contract without reasonable notice), 11 (alteration of contract terms without valid reason), 13 (determination of price after consumer bound by contract) and 14 (determination of price upon delivery or increase in price) do not apply to—
(a) transactions in transferable securities, financial instruments and other products or services where the price is linked to fluctuations in a stock exchange quotation or index or a financial market rate that the trader does not control, or
(b) contracts for the purchase or sale of foreign currency, traveller’s cheques or international money orders denominated in foreign currency,
provided that the consumer is made aware of the possibility of such cancellation, alteration or determination of price in the contract before the consumer is bound by the contract.
5. Term 14 (determination of price upon delivery or increase in price) does not apply to a price-indexation clause, where otherwise lawful, provided that the method by which prices may vary is explicitly described.