Whenever a consumer buys a product or service from a trader, they enter into a binding sales contract, and both the seller and the consumer are bound to honour the contract’s terms and conditions. If this contract is breached, the defaulting party may face legal and financial consequences.
Most consumer sales contracts are concluded verbally, and often the only proof of these transactions is the receipt which has information on what product was purchased, from where and when. Other consumer purchases are, however, concluded through a written sales contract with terms and conditions that set out both parties’ rights and responsibilities.
While sellers and suppliers are free to set the contractual terms of their sales contracts, these terms cannot however be unfair or diminish consumers’ legal rights.
Consumer legislation requires that the terms and conditions in consumer contracts are fair and do not create an imbalance between the rights and obligations of consumers and those of the sellers. Besides generally prohibiting terms that are detrimental to consumers, consumer law also provides a list of contract terms that if included in a consumer contract are considered unfair.
Terms cannot prohibit a contract from being cancelled if the trader fails to fulfil his obligations- Odette Vella
This list includes contract terms that: i) exclude or limit the liability of a trader for every possible eventuality; ii) that establish an unreasonable short period of time for notifying the trader of any defects; and iii) allow the trader to retain sums paid by the consumer should the consumer cancel the contract but the contract prohibits consumers from requesting compensation if it is the trader who cancels the contract.
Moreover, a consumer cannot be asked to pay as compensation a sum that is disproportionately high compared to the value of the goods or services purchased or hired. Furthermore, terms cannot prohibit a contract from being cancelled if the trader fails to fulfil his obligations.
Traders cannot impose a contract term that allows the seller to change significantly the original sales agreement, without giving the consumer the option to withdraw from the contract. It is also prohibited for consumers to be irrevocably bound to contract terms that they had no real opportunity of becoming acquainted with before the conclusion of the contract.
Consumer legislation protects consumers from unfair terms by making them null; thus, even if agreed to by consumers, they cannot be enforced.
Additionally, sellers are legally required to write consumer contracts in plain and intelligible language. Should a term be ambivalent, or doubt arises as to its meaning, the law provides that the interpretation most favourable to the consumer shall prevail.
Despite this legal protection, consumers are still advised to not sign a contract before first reading and understanding what they are signing for. Additionally, if while reading the contract’s terms and conditions, consumers note terms they do not like or do not agree to, these should be discussed with the seller and preferably amended before the sale is concluded.
Consumer enquiries or disputes concerning unfair contract terms may be addressed to the Office for Consumer Affairs at the Malta Competition and Affairs Authority (MCCAA). The office can be contacted through the ‘Contact us’ form on the MCCAA website below, by calling 8007 4400, or by sending a private message on the MCCAA’s Facebook page.
Odette Vella is director, Information and Research Directorate, MCCAA.
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