If you do business with consumers in the UK—you sell products, offer services, or provide access to anything—your terms and conditions must comply with the Consumer Rights Act 2015. Get this wrong and your terms might be unenforceable, or worse, you could face regulatory action.
What is the Consumer Rights Act 2015?
The Consumer Rights Act 2015 replaced the Unfair Terms in Consumer Contracts Regulations 1999. It protects consumers in the UK from unfair contract terms. For businesses selling to consumers, it's non-negotiable compliance.
The Act says that certain terms in contracts with consumers are not binding if they're "unfair." A term is unfair if it creates a significant imbalance in the parties' rights and obligations, to the detriment of the consumer.
Who is a consumer?
This matters because the Act only applies to consumer contracts. A consumer is a natural person acting for purposes outside their trade, business, or profession. If you're selling to a business, or a sole trader buying for business purposes, the Consumer Rights Act doesn't apply.
But if you're selling to individuals—people buying for personal use—they're consumers. Your terms must comply.
Mandatory information: what you must disclose
Before a consumer enters a contract with you, you must provide certain information clearly and transparently. This includes:
The main characteristics of goods or services: What are you actually selling?
Your business identification: Your company name, address, contact details, company registration number.
The total price: All-inclusive. No hidden charges buried in the small print.
Payment, delivery, and performance details: How will they pay? When and where will you deliver? When will you provide the service?
Right to cancel: For distance contracts (online, phone), consumers have a 14-day right to cancel. You must tell them this clearly.
Complaint procedures: How can they contact you if something goes wrong?
This information must be provided before the consumer is bound. If you hide it in a PDF linked from the checkout, or you bury it in terms no one reads, you're not complying.
Unfair terms: what you cannot do
Even if your terms appear in a contract, they won't be binding if they're unfair. The Act includes a list of terms that are likely to be unfair:
Excluding liability for death or personal injury: You can't try to avoid responsibility if someone is injured due to your negligence.
Excluding liability for fraud or gross negligence: You can't disclaim fraud or reckless conduct.
Excluding or limiting your obligations: If you promise to provide goods or services, you can't turn around and say "we might not actually deliver."
Allowing you to change the price unilaterally: If you offer a service at £50, you can't say "we reserve the right to charge £100 at the last minute" unless that's transparent upfront (like a variable rate mortgage).
Allowing you to cancel without reason: You can't give yourself the right to cancel when the consumer can't.
Penalizing cancellation: If a consumer cancels, you can't charge a penalty that's disproportionate to your actual loss. Reasonable restocking fees are acceptable. A 50% cancellation fee on a £50 purchase is not.
Requiring the consumer to pay if you breach: If you fail to deliver goods, you can't claim payment anyway.
The fairness test: transparency and significant imbalance
Beyond the list, a term is unfair if: (1) it creates a significant imbalance in rights, and (2) it would be contrary to good faith. For example:
A software license says: "We own everything you create using our software, even your own work product." That creates a huge imbalance. A consumer shouldn't have to give up ownership of their own work to use your software. Likely unfair.
A fitness gym contract says: "Once you sign up, you're locked in for 24 months. Cancellation requires 90 days notice and costs £500." For a £20-a-month service, a £500 penalty is disproportionate. Likely unfair.
Courts will look at the whole contract and the commercial context. A term that's unfair in a small consumer transaction might be fair in a large commercial deal.
Transparency and plain language
Your terms must be clear and transparent. They must be in plain, intelligible language. If you use obscure legal jargon or hide important terms in small print, they won't be binding. The consumer can argue: "I didn't understand that term, so it didn't bind me."
Best practice: use plain English, clear headings, and reasonable font size. Say what you mean. If your contract reads like it was written by a lawyer trying to be deliberately obscure, you're at risk.
Statutory rights you can't exclude
Some consumer rights are non-negotiable under the Act:
Right to goods of satisfactory quality: Goods must be of a quality the consumer could reasonably expect.
Right to fitness for purpose: If you know what the consumer needs, goods must be fit for that purpose.
Right to goods as described: If you say it's leather and it's plastic, that's a breach.
Right to services with reasonable care and skill: Services must be performed with reasonable care.
Right to cancellation: For distance contracts (online, phone), consumers have 14 days to cancel without reason.
You can't override these with a contract clause saying "no refunds" or "all sales final." They're legally guaranteed.
Digital contracts and distance selling
If you sell online or by phone, additional rules apply. You must:
Provide information before purchase: Product description, price, your contact details, delivery info. Do this before checkout.
Confirm the contract: Send confirmation of the order (email is fine) including all the key terms.
Offer 14-day cancellation: Consumers can cancel without reason within 14 days, and you must refund their money.
Handle complaints: Have a clear complaints process and make it easy to reach you.
Enforcement and penalties
Who enforces the Consumer Rights Act? The Competition and Markets Authority (CMA) and local Trading Standards offices. If they find unfair terms in your contract, they can:
Issue a warning: Demanding you change the terms.
Seek an injunction: Court order preventing you from using the unfair term.
Pursue enforcement action: In serious cases, fines or other penalties.
Consumers can also challenge unfair terms. If you take legal action against a consumer using an unfair term, they can raise it as a defence, and the court will refuse to enforce it.
Next steps
If you do business with consumers, your terms and conditions must be reviewed under the Consumer Rights Act. Consider: Are all mandatory disclosures clear? Are there any unfair terms? Is the language transparent? Are statutory rights preserved?
Have your consumer-facing terms reviewed by a legal expert. Upload them to QuickLegalCheck for compliance analysis.