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Saturday, 10 November 2012

Unfair or Unread Standard Terms


I’ve not long moved into a flat. To get to stay in the flat, I signed a lease agreement. Because I’m a man who likes some law, I read my lease. One of the terms was that I have to regularly iron my net curtains for the duration of my stay.

I doubt very much that anyone will notice if I do, or do not, iron the net curtains. In fact, there are no net curtains. Or indeed curtains. So I’m almost certain no one will mind that I don’t iron the non-net not-curtains. The terms in the lease were standard terms, used by our estate agent, and likely others, when they rent out residential property for short periods to normal, average people.

These standard term agreements abound. You buy a plane ticket, update iTunes, sign up to phone contracts, change bank accounts, and all the time you’re ticking boxes or signing forms saying you agree to terms and conditions. And you’ve not read them. Easyjet have tickets, I have money, and I can’t negotiate with them. Their terms will have to do, and so I’ll tick the box.

There is statutory protection for us little Droogs when dealing with Fyodor Ltd’s standard terms. Landlord and tenant law is a peculiar area that I won’t delve into here. But the main protection for consumers dealing on standard terms with companies come from two pieces of legislation.

The Unfair Contract Terms Act deals with clauses that exclude or restrict liability under the contract, but applies to all contracts. The Unfair Terms in Consumer Contracts Regulation deals only with standard form consumer contracts, but with all types of clauses in them. If a clause is unfair, then it doesn't bind the consumer. The UTCCR can’t be used to challenge clauses dealing with the price in the contract, or the key subject matter. That why the (controversial) banks charges case in failed[1]. The charges on letters sent by banks form part of the price you pay for their services.

But I’d like to think that another bit of law could apply. When you sign a contract it is immaterial if you’ve read it[2]. In cases where there is no signature, then terms must be reasonably brought to the attention of the party accepting those terms[3]. But there is doctrine of ‘non est factum’. It allows those who are faultlessly unable to read a document from being bound to its terms by their signature. Traditionally, that’s blindness and illness. Further, the key case of Saunders[4] says that the doctrine would only be available to such a person when they were held to a contract radically different from that which they thought they were entering into, and would not be available to a careless person. So the capable but lazy man who misses the small point in the standard terms but signs anyway decidedly cannot plea non est factum[5].

I can’t help but think that the old cases lay down principles that apply at a very different time. Now, it is simply not plausible that anyone (including the Supreme Court Justices) read standard terms every time they book a flight. Are terms buried in reams of small print reasonably brought to our attention before we tick the box? Should the principle behind non est factum apply? I think there is, therefore, an argument to say you should only be taken to agree to standard terms that you could have realistically actually read.

It’s hard to say how big an issue this is. It’s not like Dostoevsky Ltd.’s terms give them an interest in your house, or permission to enslave your first-born. And unfair terms law prevents them introducing too onerous charges and exclusions. But no obligations should be imposed on anyone lightly. And contract law is generally about the agreement of intentions. So why should Mr Droog be bound by stuff he could not reasonably be expected to put his mind to?


[1] [2010] 1 A.C. 696
[2] L'Estrange v F Graucob Ltd [1934] 2 KB 394
[3] Parker v South Eastern Railway Company [1877] 2 CPD 416
[4] [1971] A.C. 1004
[5] Non est factum means not my deed. 

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