Unfair Contract Terms
Contract clauses that create a significant imbalance between the parties' rights and obligations to the detriment of the consumer — often unenforceable under UK and EU consumer law.
Also known as: unfair terms, Consumer Rights Act unfair terms
Last reviewed: 10 June 2026
Unfair contract terms in consumer contracts are regulated in the UK primarily by the Consumer Rights Act 2015, which replaced and consolidated the earlier Unfair Contract Terms Act 1977 and the Unfair Terms in Consumer Contracts Regulations 1999. A term is unfair if, contrary to the requirement of good faith, it creates a significant imbalance in the rights and obligations of the parties to the detriment of the consumer. Unfair terms are not binding on the consumer, though the rest of the contract may stand.
Common unfair terms found in scam-adjacent situations include: clauses purporting to remove the right to a cooling-off period; automatic renewal clauses with no notification; liability exclusion clauses that attempt to extinguish the seller's obligation to deliver; and dispute resolution clauses that require arbitration in a distant or foreign jurisdiction making it impractical for consumers to claim.
The Competition and Markets Authority (CMA) and Trading Standards can take enforcement action against businesses using unfair terms at scale. Individual consumers can rely on the Consumer Rights Act to challenge terms in court. In the US, the FTC Act's prohibition on 'unfair or deceptive acts or practices' (UDAP) provides a federal analogue, and most states have their own UDAP statutes.
Examples
- A subscription service's small-print clause states refunds are never available; this is likely unfair under the Consumer Rights Act and cannot override the statutory right to a refund for defective services.
- A timeshare contract includes a clause requiring all disputes to be resolved by arbitration in a country the consumer has never visited — likely unenforceable as unfair.