Unfair Terms Effect
Not Binding
No term may be implied into a consumer contract that would be unfair under the following provisions, if it were an express term of such a contract.
An unfair term of a consumer contract is not binding on the consumer. This does not prevent the consumer from relying on the unfair term if they so choose and if the contract can continue in existence without the unfair term, it will continue to be binding on the parties.
A consumer contract is not excluded from the application of these provisions by reason only that—
- the consumer contract or a term of the consumer contract has been individually negotiated between the trader and the consumer, or
- the consumer does not pay a price under the contract.
Non-Application
The provisions do not apply to a term of a consumer contract that reflects—
- 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
- the provisions or principles of international conventions to which the State or the European Union is party.
The unfair contract provisions do not apply to—
- a contract of employment,
- a contract relating to succession rights,
- a contract relating to rights under family law, or
- a contract relating to— the incorporation and organisation of a company, or the creation and organisation of a partnership.
International
If—
- 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
- that contract has a close connection with the State,
the unfair contract provisions apply to the contract despite that choice.
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—
- the applicable law has not been chosen by the parties to the contract, or
- the law of an EEA State is chosen (other than an EEA State that has chosen not to be bound by that Regulation).
Consumer Contract terms to be Transparent
A trader must ensure that the terms of a consumer contract are transparent. To be so they must meet several conditions, such as plain language, presented clearly, made easily available, any novel terms are brought to the consumer’s attention, the financial consequences of the terms are understandable, and it complies with other prescribed requirements.
The assessment of transparency of a consumer contract term will take several specified factors into account. The burden of proof is on the trader, in case of dispute. Where a consumer contract is directed at a group of consumers, the average consumer will be read as the average member of that group. Before making regulations u the Minister will consult as appropriate. “Novel” and “the average consumer” are defined.
A term of a consumer contract is transparent if—
- the term is expressed in concise, plain and intelligible language,
- in the case of a term that is in writing, the term is legible and presented clearly,
- 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,
- 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,
- any costs or other financial consequences deriving from the term would be comprehensible to the average consumer, and
- the term complies with such other requirements as may be prescribed.
Assessing Transparency
In assessing the transparency of a term of a consumer contract, the following matters shall in particular be taken into account—
- the nature of the subject matter of the contract,
- the means by which the contract is communicated and presented to the consumer,
- the other terms of the contract or of any other contract on which it is dependent,
- 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
- all the circumstances relating to the conclusion of the contract.
In case of dispute, it shall be for the trader to show that a term of a consumer contract is transparent.
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.
“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”, means a consumer who is reasonably well-informed, reasonably observant and circumspect.
Interpretation of term of consumer contract
Where there is doubt about the meaning of a consumer contract term, the one most favourable to the consumer will be taken. This will apply in proceedings for an application to a court for a declaration or injunction.
Duty of Court
The court will determine whether a term is unfair regardless of whether the matter is raised in proceedings before it relating to a term of a consumer contract. The court must have sufficient legal and factual material before it to assess whether the term is unfair for the requirement to apply.
Application to Court for Declaration or Injunction
On n application by an authorised body for a declaration that a consumer contract term is unfair, the court may declare the term unfair, prohibit the use or continued use of such a term or similar term or impose specified conditions on the trader. The court may make a declaration on application by an authorised body as to the proper interpretation of any term in a consumer contract.
Before making such applications, an authorised body must publish a notice of its intention to apply to the court for a declaration in Iris Oifigiúil and at least two national newspapers or other manner directed to by the court. 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 body considers an unfair term. In this case, the court may grant an injunction as appropriate.
An injunction granted may relate to the use of a particular contract term or to a similar term used or recommended for use by the trader. The court will take account of all the interests involved, particularly the public interest to protect consumers. Every person with an interest in an application under this section will be entitled to appear and be heard by the court on hearing of the application.
Court Order Matters
An application by an authorised body, other than the Competition and Consumer Protection Commission (CCPC), will be on notice to the CCPC. The authorised body does not need to prove anything regarding loss or damage in an application. These provisions are without prejudice to the rights of a consumer to rely on this Part in any case before a court. An application to the Circuit Court will be to the district where the trader usually resides or does business. “Court” is defined as Circuit Court or High Court.
Where the Circuit Court is of the opinion that the application is not appropriate to it, it may transfer it to the High Court.
Where a court makes an order declaring that a term of a consumer contract is unfair, the authorised body that made the application for the order and where it did not do so, the CCPC, will publish a copy of the order on its website, before the expiration of 90 days beginning (i) the day on which the period for bringing an appeal expires, where no appeal is brought, or (ii) the day on which the appeal is finally determined, withdrawn or abandoned, where an appeal is brought.
In certain circumstances, an authorised body and, where it did not make the application for the order, the CCPC may, instead of publishing a copy of the order, publish a notice which sets out the term of a consumer contract that the court declared to be unfair without disclosing information not permitted to be disclosed under legal or regulatory requirement. In this instance, both the authorised body and the CCPC will publish the same notice.
Offences
Where an authorised body published an order declaring that the term of the consumer contract to which the order relates is unfair or a notice setting out the term of a consumer contract that the court has declared to be unfair and (ii) a trader uses the term in a consumer contract, the trader commits an offence.