If a consumer orders something online, or buy a piece of furniture, or signs up for a gym membership, or even uses a dry-cleaning service, this may entail agreeing to and concluding a sales contract.
Consumer legislation stipulates that the standard contract terms and conditions included in consumer contracts must be fair and should not diminish consumers’ legal rights. In other words, the terms and conditions consumers are requested to agree to and sign should not create an imbalance between the rights and obligations of consumers on the one hand, and those of sellers and suppliers on the other.
In addition to prohibiting unfair contract terms, the Consumer Affairs Act contains a list of specific terms that, if included in a consumer sales contract, are deemed unfair and hence illegal. These include terms that:
1. Exclude/limit a trader’s liability
This refers to situations when a trader claims that their company is not liable if, for instance, the product is damaged by the company’s employees while delivering it to the consumer’s house; or in the case of online purchases, the seller states that the company is not liable if the product ordered is lost in transit even when the delivery of the item was part of the sales transaction.
2. Prohibit compensation claims in case of non-delivery
A consumer cannot be prohibited from cancelling a contract or to claim compensation if the trader fails to fulfil his obligations. These include terms that limit the consumers’ right for compensation when a service or product is not provided as agreed or on the date agreed.
3. Allow only one-sided compensation
These include terms that allow the trader to retain a deposit paid by the consumer should the latter decide to cancel the contract, but the consumer is prohibited from requesting compensation if it is the trader who cancels or is unable to honour the sales contract.
4. Request excessive compensation
A consumer cannot be requested to pay to a trader as compensation, a sum that is disproportionately high when compared to the value of the goods or services purchased or hired. This includes situations where the fee for not honouring the sales contract, such as when a consumer cancels an order or booking, is higher than the total cost of the sales contract.
Discuss and clarify any doubts before concluding the sale
5. Include hidden terms
It is prohibited to irrevocably bind consumers to terms that they had no real opportunity of becoming aware of before agreeing to the contract. This includes situations where consumers are asked to sign a sales contract without providing them with a copy of the terms and conditions at the time when the sale is concluded.
6. Allow one-sided contract changes
A trader cannot impose a contract term that allows him to unilaterally change the conditions of the sales agreement, such as imposing a condition that permits the trader to change the agreed delivery date of goods or supply of service.
7. Automatically extend fixed contracts
This refers to clauses that enable the trader to automatically extend a contract of fixed duration even if the consumer does not indicate his agreement to such an extension.
8. Allow binding price variations
A trader cannot include a term that allows him to change the agreed price without giving the consumer the option to cancel the contract of sale.
If unfair terms such as these are included in a consumer contract, the trader cannot enforce them and oblige consumers to adhere to them, even if the consumer signed the contract with these terms.
Furthermore, consumer legislation stipulates that consumer contracts should be written in plain and intelligible language that can be understood by the average consumer. Should a term be ambivalent, or if any doubt arises about the meaning of a term, it is the interpretation most favourable to the consumer that must prevail.
Even though consumers are well protected against unfair terms, consumers must always act responsibly by carefully reading what they are signing. If there are any clauses that they do not understand or that they do not agree with, they should discuss and clarify any such doubts before concluding the sale. Should there be any amendments of the contract, it is important that these are signed and dated by the company.
If consumers have any unresolved disputes with sellers regarding unfair contract terms, they may seek the assistance of the Office for Consumer Affairs at the MCCAA. The office may be contacted either via e-mail info@mccaa.org.mt, by calling 8007 4400 or by sending a message through its Facebook page: @MCCAA.
www.mccaa.org.mt
odette.vella@mccaa.org.mt
Odette Vella, Director, Information and Research Directorate