The contract rules for selling to consumers

When selling to consumers, you will more often than not use your own standard terms without much, if any, negotiation – i.e. your customer will either accept or decline before making a purchase.

Depending on what you sell – whether goods, services or digital content; and the way you sell  - whether on-premises, off-premises or distance-selling, you will be bound by various consumers protection legislation that you can’t contract out of. These rules are there to protect consumers’ rights by prohibiting or preventing businesses from imposing unfair practice.

Although there will be specifics for your business, generally you must make sure that:

• Your terms are written in plain and legible language.
• You present the consumers with key information and draw their attention to any important terms (e.g. the returns and refund policies) in accordance with the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.
• The consumer should be given a chance to read the terms before accepting them.
• You should not use unfair terms that are either “blacklisted” (automatically unenforceable) or in the “grey list” (may be unenforceable) under the Consumer Rights Act 2015. Some common terms under a B2B setting may become unenforceable under a B2C contract. For example, “entire agreement” clauses are unlikely to be enforceable if they have the effect of excluding the consumer’s right to remedy for a trader’s misrepresentation, false or misleading information or change to its pre-contract commitments or contract terms without the consumer’s express agreement.
• You are compliant with any sector-specific regulations in respect of consumer protection (e.g. financial services, gambling, selling tobacco or alcohol, etc.).
• The consumers’ personal data is collected and processed in compliance with privacy law.

Selling to a business – what’s different?

There are some differences when selling to a business. You will have more freedom to negotiate contractual terms with a business on the basis of your best interest, including disapplying certain terms implied under the law.

However, although it is generally assumed that businesses have equal bargaining power, this is not always the case. The courts are often more ready to uphold what businesses have agreed unless the facts paint a different picture.

Another thing to consider is if you use your own standard terms & conditions for your customers then those terms, especially liability limitation and exclusion provisions, must be reasonable to be enforceable under the Unfair Contract Terms Act 1977.