The Consumer Rights Act 2015 comes into force on 1 October, consolidating and extending the law against unfair terms in consumer contracts. The CMA, its main enforcer, has issued a guide to compliance, which explains the requirements for transparency and prominence.
“Transparency” is the new name for legible, plain and intelligible language, now required in all terms of consumer contracts:
- A transparent contract term must be intelligible to consumers. It must be legible and in plain language.
- A term is prominent if the average consumer would be aware of it (considering all the information given to the consumer, not just the contract document).
A lack of transparency or prominence may be one factor making a term unfair and therefore invalid. Terms fixing the price and defining the product need not be fair if they are transparent and prominent.
The Competition and Markets Authority has taken over the OFT’s role in enforcing these requirements, and has issued a series of guides to the new law.
The CMA spells out that prominent, transparent text should enable the consumer to make a properly informed decision. It is not enough that a lawyer could read and understand the terms. On the other hand, consumers don’t read contract terms, so the price and product need to be well described up front, or the clearest terms won’t do much good.
CMA 37: Unfair contract terms guidance, 31 July 2015, paragraphs 2.42 to 2.61 and 3.20 to 3.32
