A term can be written into a contract and still be unfair and non-binding on the consumer.
Part 2 of the Consumer Rights Act 2015 controls unfair terms in consumer contracts and consumer notices. A term is not automatically enforceable merely because it appears in small print or the consumer clicked “I agree”.
The core fairness test asks, broadly, whether contrary to good faith the term causes a significant imbalance in the parties’ rights and obligations to the consumer’s detriment. Transparency and prominence also matter, especially for core price/subject-matter terms.
Key points
- Unfair terms are not binding on the consumer, although the rest of the contract can continue if capable of doing so.
- Terms must be transparent: expressed in plain, intelligible language and, if written, legible.
- Some terms are highlighted by the Act’s “grey list” as potentially unfair, such as disproportionate charges or one-sided cancellation/variation powers.
- A court must consider fairness where it has sufficient legal and factual material to do so, even if the consumer has not raised it in exactly those words.
What makes a term potentially unfair?
Look at the contract as a whole, the nature of the subject matter and the circumstances when the term was agreed. A clause that lets the trader change price whenever it wishes, keeps all prepaid money after trivial cancellation, excludes liability for its own serious non-performance, or gives the trader broad rights without a comparable consumer protection can raise fairness questions.
Transparency is not the same as fairness
A clearly written term can still be unfair. Equally, unclear drafting creates its own problem, where a consumer term can have different meanings, the interpretation most favourable to the consumer is generally preferred.
Core terms and prominence
The Act limits the fairness assessment of the main subject matter and price only where the relevant term is both transparent and prominent. Hiding a key charge in dense small print can therefore be highly significant.
A term can be written clearly and still be unfair.
Part 2 of the Consumer Rights Act 2015 applies a fairness test to consumer contract terms and certain consumer notices. Broadly, a term is unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations to the detriment of the consumer. An unfair term is not binding on the consumer, although the rest of the contract can continue where it is capable of doing so.
Transparency matters but is not a complete defence. A term should be expressed in plain, intelligible language and, where written, be legible. A perfectly readable term can still create an unfair imbalance. The CMA updated its detailed unfair-contract-terms guidance in July 2026, so older summaries should be read with care.
Price and main subject matter do not get a blanket exemption.
The Act limits fairness review of terms specifying the main subject matter of the contract or assessing the appropriateness of the price against what is supplied, but only where those terms are transparent and prominent. “Prominent” means brought to the consumer’s attention in a way an average consumer would be aware of it.
This does not stop scrutiny of other aspects of a price term, for example, an excessive exit charge, concealed mandatory fee, unilateral price-variation mechanism or other ancillary term. A business cannot bury a financially significant obligation deep in small print and simply describe it as part of the price.
Terms that regularly deserve scrutiny.
| Type of term | Why it may be problematic |
|---|---|
| Excessive cancellation charge / automatic loss of all money paid | May go beyond the trader’s legitimate loss and create a disproportionate sanction. |
| Trader can change price or service whenever it wishes | Can create a one-sided variation power without valid reason, notice or consumer exit protection. |
| Long automatic renewal or difficult cancellation | Can trap the consumer or create materially unbalanced termination rights. |
| Trader excludes all liability for poor service or faulty goods | Statutory liabilities cannot simply be contracted away. |
| Consumer is bound by terms they had no real opportunity to see | Raises transparency/incorporation and potentially fairness issues. |
| Trader can cancel freely but consumer faces lengthy notice/large fee | Asymmetrical rights can indicate significant imbalance. |
| Disproportionate default/admin fees | The amount and legitimate purpose need scrutiny; labels do not make penalties fair. |
“You agreed to the terms” is not the end of the analysis.
Clicking “I agree” can establish agreement to properly incorporated terms, but consumer law still controls their effect. A term may fail because it was not incorporated, because it is ambiguous, because it is prohibited from excluding statutory liability, or because it is unfair. These are different arguments and should not be blurred together.
Where a term has more than one meaning, the interpretation most favourable to the consumer can apply. Courts also have a statutory duty to consider fairness where sufficient legal and factual material is before them, even if the consumer has not framed the argument perfectly.
Challenge the term itself, not just the outcome.
Useful wording
“You rely on clause [X]. Please explain how that term is fair under Part 2 of the Consumer Rights Act 2015, including why it does not cause a significant imbalance to my detriment and how the financial/termination consequence is proportionate to your legitimate interests. I also dispute that the term was sufficiently prominent/transparently presented at contracting.”
Save the version of the terms actually supplied when the contract was made. A link to today’s terms is weak evidence if the wording has changed. Also preserve the checkout/sign-up screens showing how prominent the disputed term really was.
Unfairness can overlap with misleading practice.
A hidden or one-sided term can raise more than one legal issue. The term itself may be unfair under the Consumer Rights Act, while the way it was presented or omitted during the sales process may also amount to an unfair commercial practice under the Digital Markets, Competition and Consumers Act 2024. Keep these routes distinct: one attacks the contractual term; the other may attack the trader’s sales conduct.
In practice
- Quote the exact clause and explain its practical effect rather than complaining about “the terms” generally.
- Show how the clause was presented at the point of sale, including font, screens and surrounding wording.
- Compare what the clause allows the trader to do with what the consumer can do.
What to do
A practical next-step plan
- Obtain the version of the terms that applied when you contracted.
- Identify the precise clause and how it was presented.
- Explain the detriment the clause causes in practice.
- Check current CMA unfair-terms guidance and the Consumer Rights Act grey list.
- Challenge reliance on the term and request the underlying calculation or justification where relevant.
Common traps
Things that often confuse the issue
- Do not assume every harsh term is automatically unlawful.
- Do not analyse fairness using a later version of the contract.
- A prominent headline may not cure contradictory or buried wording elsewhere.
Evidence worth keeping
“It was in the small print” does not settle the argument
Consumer law does not contain a simple rule that anything in small print is automatically void. The real questions are whether the term was incorporated, whether written wording is transparent, whether a significant term was sufficiently prominent, and whether the term creates an unfair imbalance contrary to good faith.
For the core subject matter and price exemption from the fairness assessment, transparency and prominence are especially important. Other wording, such as disproportionate cancellation charges, unilateral variation rights or terms that try to obstruct legal remedies, can remain assessable for fairness even when written clearly.
The CMA refreshed its unfair-terms guidance in July 2026
The underlying Consumer Rights Act rules have not suddenly changed, but the CMA updated CMA37 in July 2026 to reflect the current enforcement landscape. For a serious dispute, use the current guidance rather than relying on an old generic statement that “hidden terms are illegal”. Identify the exact term, where it appeared, when it was supplied, what practical disadvantage it creates and why the trader says it can rely on it.
Official sources
Check the rules behind this guide
- Unfair contract terms guidance CMA37: GOV.UK
- Writing a fair contract for customers: GOV.UK
- Consumer Rights Act 2015: legislation.gov.uk
- Unfair contract terms guidance CMA37: CMA / GOV.UK
These are official or primary sources for this topic. Rules, scheme terms and deadlines can change, so check the live source before relying on a formal time limit or procedure.