Reading the small print – new Consumer Rights Act calls retailers to speak to consumers in plain English
Friday 21st August 2015
It’s over 30 years since the noted judge Lord Denning pronounced lawyers to be ‘the worst manglers of the English language’; but now all contractual terms between retailers and consumers will be subject to a ‘transparency test’ to ensure that they are clear.
The Consumer Rights Act 2015, which will apply to contracts entered into on or after 1 October, will replace and consolidate existing law surrounding consumer contracts. It contains a requirement that contractual terms or notices to consumers are transparent, meaning that they are ‘expressed in plain and intelligible language and [are] legible’.
The Competition and Markets Authority (CMA) has given guidance on how businesses can comply with the transparency test. This can be broken down into three key areas:
- using clear language – terms and notices should make grammatical sense, use short sentences and ‘ordinary’ language wherever possible;
- being legible- the specific reference to being ‘legible’ has led the CMA to warn that printing terms and conditions in a tiny font on poor quality paper may be a breach of the transparency test; and
- adequately informing the consumer- traders will need to ensure that consumers are able to understand the full implications of entering into a contract. This means that statutory references and particularly legalistic terms will need to be accompanied by a reasonable explanation rather than ‘buried’ in the small print.
Companies with terms or notices which are found to be in breach of the transparency test can be investigated by the CMA and other regulators, and in extreme cases may be taken to court. Critically, individual consumers also have the right to challenge terms and if a term or notice is found to fail the test, it may be struck out by the courts.
Retailers should start to think now about ensuring that their terms and conditions do not fall foul of the new requirements, if they want certainty that they can rely on them.