Are your consumer terms fair? The CMA’s open letter is a stark reminder for all businesses to review their contracts

Following the conflict in the Middle East, energy costs are on the rise again and household budgets are under pressure, the spotlight is firmly back on how businesses treat their customers and the small print that governs those relationships.

A recent open letter from the Competition and Markets Authority (the CMA) to heating oil suppliers is a timely reminder that the rules around fairness in consumer contracts are being actively enforced. The CMA’s message was clear, businesses need to: check their terms and conditions especially clauses that limit or exclude your liability, to ensure they comply with consumer protection law.

What has the CMA Said?

In September, the CMA reminded heating oil suppliers that their terms and conditions specifically those detailing what happens if things go wrong, must be clear and fair. This follows action taken after some customers had their orders cancelled when oil prices surged due to conflict in the Middle East, leaving many customers in the lurch when they needed heating most. The CMA secured compensation for those affected, underlining the importance of fair treatment in tough times.

Why does this matter for all businesses?

While the CMA’s letter was directed at oil suppliers, its message applies to any business that supplies goods or services to consumers. In uncertain times, particularly when prices are rising, customers will pay closer attention to how businesses treat them especially when things go wrong. Unfair terms can lead not just to unhappy customers, but also to the CMA taking enforcement action which could mean you are required to pay compensation, and adverse publicity if the CMA publicise your business’s wrongdoing and the CMA’s findings. In today’s world of online reviews and social media, the reputational damage alone can be significant.

What does the law actually require?

Put simply, any term in a consumer contract must be fair and transparent. A term is likely to be considered unfair if it creates a significant imbalance between the business and the customer especially where the business holds all the cards and the customer has no real say. The CMA is particularly concerned about terms that limit or exclude a business’s liability for example, clauses that state “we accept no responsibility if your order is delayed or cancelled.” These types of blanket exclusion clauses are a red flag.

Top 5 tips for fair terms in consumer contracts

1. Plain English always: Avoid legal jargon that most people won’t understand. For example, if you have a term like “force majeure,” explain what it means in simple words.
2. Don’t exclude liability unfairly: Your contract should not say that you can avoid responsibility even if a problem was your fault. For example, if you cause a delay or fail to deliver and it is within your control, you should not refuse compensation.
3. Let consumers walk away before it hurts: If you need to rely on a contract term that could disadvantage the customer (like changing delivery times or cancelling orders), you must notify them first and allow them to cancel without a penalty.
4. Only limit liability for things outside your control: Make sure any limits on your responsibility only apply where something genuinely outside your control happens, not for issues you could have prevented.
5. Be clear about when terms apply: Explain when and how any “get out” terms might actually be used. If it’s possible for you to control those situations, then that has to be made clear, and you should not rely on those terms to avoid liability.

How we can help

Our team regularly advises businesses on consumer contracts and terms and conditions. Whether you need a full review of your existing terms, help drafting new ones, or just a quick sense-check, we are here to help. We can make sure your terms are fair, transparent, and fit for the current regulatory landscape giving you peace of mind and helping you build trust with your customers.

If you would like to discuss your requirements further with one of our specialist solicitors, then please fill out our contact form or call 03300 297 347 for more information.

This article is for information only and does not constitute legal advice. We recommend seeking professional advice before taking any action on the information provided. If you would like to discuss your specific circumstances, please feel free to contact us on 0330 111 3131.

Get In Touch

Carla Murray is a Partner and Head of the Commercial team at Slater Heelis, advising businesses on a wide range of commercial agreements, distribution models, manufacturing arrangements and technology agreements, as well as supporting clients with intellectual property protection and data protection strategy. If you’d like to speak with Carla, please don’t hesitate to contact us by calling 03300 297 347 or completing our online contact form.