All may be fair in love and war but not in financial contracts with consumers

Though the Act is generally an evolution of existing legislation in the area, it extends the scope of protection consumers are afforded from unfair terms in a number of important ways. For example:

• for the first time the fairness test applies not just to standard terms but also to negotiated terms;
• the regime applies to consumer notices as well as contractual terms and there is a new prominence requirement that terms must meet in order to fall within the “core terms” exemption; and
• in future, the regulator is able to take action where a term fails the transparency requirement independently of the overarching fairness requirement.

This briefing discusses these and other changes relating to fairness in more detail.