Avoiding the naughty step for bad clauses


As mentioned in a previous blog post, terms and conditions (‘T&Cs’ or ‘Ts&Cs’) get a bad press.

They are usually dull. They are typically boring. They rarely get read.

To be frank, is it any wonder when many contain clauses dripping with impenetrable legal treacle such as this:

(NB please do not try to actually read these clauses courtesy of the Office of Fair Trading’s (OFT) naughty step for bad clauses — otherwise known as 'OFT311')

The clauses of these Conditions and each sub-clause thereof are several and if any part of any clause or sub-clause shall be void, invalid or unenforceable then the remainder of such clauses or subclauses shall nevertheless be valid and enforceable

Or this:

The Carrier shall have a general lien on any Consignment for its charges for the carriage or storage of that or any other Consignment for the Customer or for any other monies due from the Customer to the Carrier

So why does this all matter? After all, legalese seems to be in very rude health. Surely no statins, fitness plans or bucket loads of fiddly, colourful tablets for it?

As it happens, this is still pretty much the case for business to business (B2B) contracts, but for business to consumer contracts (B2C), legalese is not looking quite so hot. It looks a tad peaky, if truth be told: not quite in intensive care, but getting there.

This is all thanks to the quietly revolutionary Unfair Terms in Consumer Contract Regulations 1999. The previous incarnation of these regulations introduced the concept of drafting contracts in ‘plain intelligible language’. A ghastly concept for many old school lawyers but we are where we are. The ancient regime is no more.

So, whilst most lawyers are familiar enough with this nouveau regime, many are not so familiar with the handy OFT guidance on unfair terms in consumer contracts.

So why not pop along to its new user-friendly hub. Watch how the OFT has been acting ‘all Paul Daniels’ (or ‘all Derren Brown’ for the younger readers among us) and magicking away clauses at the flick of a legal wand for the past decade or so.

By way of example, here’s a clause of some 98 words:

Time shall not be of the essence of the Contract and the Company shall not be liable for any delay in installation in the event of any strike, lock out, trade dispute, accident, fire, flood or any natural disaster or act of God or any contingency whatsoever beyond the reasonable control of the Company affecting the supply or installation of the Contract overleaf. Such suspension or cancellation shall not constitute a breach of Contract by the Company, nor will the purchaser be liable to claim for any loss or damage howsoever arising as a result of these circumstances

KAZAM! (Is that a word?) Using the legal powers vested in it, the OFT shrinks the clause to a mere 12 words:

The Company will manufacture and install the items within a reasonable time

Now that is the sort of behaviour that gives most lawyers and businesses nightmares: spending all that time drafting a clause only for the OFT to have unfeasible amounts of fun turning it into a very sorry shadow of its former self.

I might not always agree with the OFT’s approach. It is in my DNA as a lawyer not to, but I would agree with the general principle of drafting in plain English. In fact, even if the regulations did not exist, I’d want to see a move towards more comprehensible legal documents.

Other lawyers say that the OFT has gone too far, having been a tad over-zealous with interpreting the law. After all, it is only the courts that can say one way or another whether a term in a consumer contract is acceptable.

Be that as it may, the simple truth is that the OFT guidance is pretty persuasive and lawyers and businesses would do well to consider it when drafting consumer contracts. Indeed, the OFT has made life that bit easier by putting a search function on its unfair terms hub. How very nice of them! And what thanks do they get? Well, some from me for a start.

Anyhow, I’d be very careful indeed if you are minded to use common words and phrases such as:

  • force majeure
  • indemnity
  • lien
  • liquidated damages
  • pro rata
  • risk in goods
  • time of the essence, and
  • title to property 

as you might find that they are deemed to be unfair under the regulations. After that, it is far too messy and depressing to contemplate. If you are feeling brave, just take a look at regulation 12 of the regulations. Personally, I never like the reference to the phrase ‘injunctions to prevent continued use of unfair terms’: all so unseemly and expensive-sounding.

PS Our interview with Andrew Sharpe went down a storm (lots of retweets!). Thank you for your comments and kind words. We are well aware that it was easily Pulitzer Prize material but sadly the deadline has passed for entries in the journalism category. We will never know what could have been.

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