Unfair contract terms in the UK: the Consumer Rights Act test

Sample clause

Written for booking terms of Northern Code School, a fictional Leeds provider of online coding courses for adults.

Course Terms. 1. Cancellation. The Student may cancel within 14 days of booking for a full refund. After that, the Student may cancel at any time before the course starts and receive a refund of the fee less the cost of any materials already sent, up to 10 per cent of the fee. 2. Changes to the course. The School may change a tutor, a session time or the order of topics where needed, and will tell the Student at least 7 days before. If a change materially reduces what was booked, the Student may cancel and receive a refund for the unused part. 3. Renewal. A monthly membership renews only after a reminder at least 7 days before each renewal and can be cancelled online at any time.

Sample wording, not legal advice.

Variants

What to negotiate

• Use the grey list as a checklist

  Schedule 2 Part 1 lists terms that may be regarded as unfair, such as terms letting the trader change the characteristics of the service without a valid reason, keep sums paid when the consumer cancels without equivalent compensation the other way, or bind the consumer while the trader can end freely. A grey list term is not automatically unfair, but it is where scrutiny starts.

• Transparent and prominent, both

  A core term is exempt only if it is transparent, in plain and intelligible language and legible, and prominent, brought to the consumer's attention so an average consumer would be aware of it. A fee buried in small print loses the exemption and can be tested for fairness. Put the price and what is included at the top.

• Fix by adding balance

  Many terms become fair when the consumer gets something matching the trader's right: notice before a change, a right to cancel if the change hurts, a refund that reflects real costs. The CMA's guidance, CMA37, gives examples of terms revised this way. Removing the trader's flexibility entirely is rarely necessary.

The risk of leaving it out

A trader that relies on an unfair term finds it not binding at the moment it matters, such as when a consumer cancels or complains about a change. Regulators, including the CMA and trading standards, can also seek undertakings or court orders against unfair terms used across a business's contracts, which costs far more than a review of the standard terms.

The fairness test in section 62

Section 62 of the Consumer Rights Act 2015 says a term is unfair if, contrary to good faith, it causes a significant imbalance in the parties' rights and obligations to the consumer's detriment. Fairness is judged at the time the contract is made, considering the nature of the subject matter and all the circumstances and other terms. The court must consider fairness even if neither party raises it. Section 65 adds that a trader cannot exclude or restrict liability for death or personal injury caused by negligence. Law checked on 21 October 2026. This page explains how the law works and is not legal advice.

Grey list items against the rewrites

Northern Code School's old terms kept the whole fee on any cancellation, let the school change course content at will, and rolled memberships over without a reminder. Keeping the fee mirrors the grey list item on consumers paying a disproportionately high sum or losing sums paid on cancellation. Changing content at will mirrors the item on altering the service without a valid reason. A silent rollover mirrors the item on automatic extension with an unreasonably early deadline to object. The sample answers each with a refund tied to real cost, notice and an exit, and a reminder.

UCTA for business contracts

Business to business contracts are outside Part 2 of the 2015 Act. There, the Unfair Contract Terms Act 1977 controls exclusion and limitation clauses: some exclusions are void, and others are valid only if reasonable, judged by factors in Schedule 2 of that Act such as bargaining strength and whether the customer could have bought elsewhere without the term. The exclusion clause page covers that test in detail; this page is about consumer terms.

Where the clause sits in a generated document

Service agreements, course terms and privacy notices are the documents where consumer terms live. When asking the AI document generator for consumer terms, state the cancellation refund, the notice for changes and the renewal reminder in the prompt, and ask for a line that the consumer's statutory rights are not affected.

Documents that carry this clause

Service agreement template with scope, service levels and an exitA service agreement template has to say what is supplied, how well, for what fee, who is liable for what, and how either side gets out. This one is filled in for Beacon Systems supporting Harlow Freight's IT for an initial 24 months from 1 October 2026 at $8,400 a month plus GST, with 40 hours included and $220 an hour beyond them. Twelve numbered clauses cover the services, a four level severity table, client duties, fees with a CPI adjustment, confidentiality, privacy, IP, a liability cap, termination and a three step dispute ladder under Victorian law.Tutoring agreement template with weekly sessions and progress notesParents pay for tutoring and then wait months to find out whether it is working. This agreement puts a written progress note every four weeks, prices the whole school year term by term, and carries the tutor's working with children check number so a parent can verify it in a minute.

Questions people ask