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Unfair Terms The source of the new Part VI of the Consumer Affairs Act is the EU Directive 93/13 on Unfair Terms in Consumer Contracts. The scope of this Directive, and hence of its local counterpart is to protect acquirers of goods and services against the abuse of power by the seller or supplier, in particular against one-sided standard contracts and the unfair exclusion of essential rights in contracts.
An unfair term means any term in a consumer contract, which on its own or in conjunction with one or more other terms: 1. creates a significant imbalance between the rights and obligations of the contracting parties to the detriment of the consumer; or 2. causes the performance of the contract to be unduly detrimental to the consumer; or 3. causes the performance of the contract to be significantly different from what the consumer could reasonably expect; or 4. is incompatible with the requirements of good faith.
A consumer contract which includes a prohibited or unfair term shall not be binding on the consumer unless the contract is capable of continuing in existence without the unfair term.
Furthermore, consumer contracts must use plain and intelligible language which must be understood by the consumer to whom the contract is directed.
There can be no doubt that all traders - regardless of must therefore have a very close look at the contracts, agreements, forms and terms and conditions used in their relationships with their customers, existing and future, in order to ensure compatibility with the new law governing unfair terms.
CDF Advocates has significant experience in reviewing contracts in order to “purge” them from unfair terms while at the same time protecting the businessman’s rights.
When the relative provisions come into force, consumer associations will have the right to sue traders for having forms which are not compliant with the new rules, and the Director of Consumer Affairs will have the power to issue a "compliance order" requesting deletion or alteration of unfair terms or the incorporation of terms which are considered necessary for the benefit of consumers.
Contact us to discuss how we can assist you in avoiding being caught unprepared on the law regulating unfair terms. Click
here to read a full article about unfair |
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