Guide · Contracts

Unfair contract terms

Fairness, transparency and prominent core terms under the Consumer Rights Act 2015.

Reviewed 9 September 2026General information

A contractual term is not immune from challenge just because you agreed to the contract.

Consumer contract terms are subject to the fairness and transparency controls in the Consumer Rights Act 2015. A term that creates a significant imbalance contrary to good faith to the consumer’s detriment can be unfair and therefore not binding on the consumer.

This analysis is especially relevant to broad variation powers, disproportionate termination charges, one-sided exclusions and terms hidden or expressed unclearly.

Key points

  • Fairness looks at the contract and circumstances at the time of agreement.
  • The statutory grey list identifies types of terms that may be unfair.
  • Transparent core price/subject-matter terms need sufficient prominence for the special exclusion from fairness assessment.
  • If wording is ambiguous, the consumer-favourable interpretation generally prevails.

How to analyse a disputed clause

Quote the clause exactly. Then ask what power it gives the trader, what reciprocal protection the consumer has, whether the clause was signposted, and what practical detriment results. Avoid arguing only from the outcome.

Charges and exit fees

A charge can be contractually stated but still require fairness analysis. Consider whether it is disproportionate, whether it reflects a legitimate contractual structure and whether the consumer could understand the financial consequence when entering the agreement.

Exclusion and limitation clauses

Consumer law restricts attempts to exclude mandatory statutory rights. A trader cannot contract out of core Consumer Rights Act obligations in the way a business-to-business contract might attempt to allocate risk.

In practice

  • Attach the actual term and explain how it operated against you.
  • Compare the term with current CMA unfair-terms guidance.
  • Do not allow the trader to answer “you agreed to our terms” without addressing fairness.

What to do

A practical next-step plan

  1. Obtain the historic terms.
  2. Identify the clause.
  3. Assess transparency/prominence.
  4. Explain the imbalance and detriment.
  5. Challenge reliance on the term and seek the appropriate remedy.

Common traps

Things that often confuse the issue

  • Not every fee is a penalty or unfair term.
  • Do not mix common-law penalty doctrine with the statutory unfair-terms test without distinguishing them.
  • A clause can be clear yet unfair.

Evidence worth keeping

Contract and applicable terms
The exact clause in dispute
How and when the clause was presented
Evidence of how it was applied
Any imbalance, charge or restriction it caused
Complaint and trader explanation

Ask the trader to justify the operation of the term.

Useful wording.

“I dispute the fairness of clause [x] under Part 2 of the Consumer Rights Act 2015. Please explain the legitimate basis for the term, how it was made transparent/prominent, and why its operation does not create a significant imbalance to my detriment.”

A finding that one term is unfair does not necessarily cancel the entire contract; the agreement can continue so far as practicable without the unfair term.

The statutory “grey list” is a warning list, not an automatic blacklist.

Schedule 2 gives indicative examples of terms that may be unfair, such as disproportionate cancellation charges, unilateral changes without valid reason, terms allowing the trader alone to decide conformity, or barriers to legal remedies. The actual assessment remains fact-sensitive.

Trader saysQuestion to ask
“It is in the terms.”Was it incorporated, transparent, prominent where required and fair?
“You agreed to the fee.”Is the amount proportionate and what legitimate interest does it protect?
“We can change anything.”How constrained is the variation power and what notice/exit right exists?
“Our decision is final.”Does the term improperly restrict legal or complaint remedies?

Core price/subject-matter terms are not completely immune from scrutiny.

Certain terms specifying the main subject matter or price can be excluded from the fairness assessment only if they are transparent and prominent and meet the statutory conditions. Other legal controls can still matter. A trader cannot simply label every disputed charge “the price” and assume Part 2 is irrelevant.

Consumer Rights Act fairness is more than “I do not like this clause”.

Under Part 2 of the Consumer Rights Act 2015, an unfair consumer term is not binding on the consumer. The statutory test asks, contrary to good faith, whether the term causes a significant imbalance in the parties’ rights and obligations to the detriment of the consumer. Context, the nature of the subject matter and the other terms can matter.

Related ConsumerWise guidance

Continue from here.

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Official sources

Check the rules behind this guide

These are official or primary sources for this topic. Rules, scheme terms and deadlines can change, so check the live source before relying on a formal time limit or procedure.