This guide is maintained as a current resource for September 2026 and covers only the laws of England and Wales. Information is for general guidance, not legal advice. Consult a qualified solicitor for advice specific to your situation.
Learn how to challenge unfair contract terms in England and Wales. This guide explains what constitutes an unfair term under the Consumer Rights Act 2015, how to identify and challenge unfair clauses, practical steps to take with traders, reporting to regulators, and remedies available through courts and enforcement action.
Unfair contract terms can place consumers at a significant disadvantage by giving one party disproportionate rights or limiting the other's legal protections. Under English law, there are specific statutory safeguards that allow individuals to challenge unfair terms used by traders in agreements for goods, services and digital content. This article explains the legal framework, how to identify potentially unfair terms, the process for challenging them, practical steps you can take and the remedies available if a term is found to be unfair.
What Is an Unfair Contract Term?
An unfair contract term is one that creates a significant imbalance between the rights and obligations of the parties to the detriment of the consumer, contrary to the requirement of good faith. Unfair terms are not binding on consumers and can be challenged in court or through regulatory action. The primary legislation governing unfair terms in consumer contracts is the Consumer Rights Act 2015 (CRA).
Under the CRA:
- a standard term or notice may be assessed for fairness unless it relates to the main subject matter of the contract or sets the price, provided those are clear and prominent;
- terms that cause a significant imbalance in the parties' rights and obligations are likely to be found unfair;
- there is an “indicative list” (commonly called the grey list) of terms that are often considered unfair, such as excessive cancellation fees or unilateral price changes.
Terms that restrict liability for death or personal injury resulting from negligence are automatically unenforceable under separate statutory provisions, and can also be challenged.
When Can You Challenge a Contract Term?
1. Consumer Contracts Covered by the CRA
The CRA applies to contracts where an individual contracts as a consumer - that is, for purposes mainly outside business, craft or profession. It protects standard terms and notices used in these contracts, including those displayed in brochures or online.
2. Historical Contracts
If a contract was entered into before 1 October 2015, the old Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs) apply. The UTCCRs operated on similar principles of fairness and transparency, and terms under these historical contracts can still be challenged on that basis.
3. Financial and Specialist Contracts
Where the contract involves financial services, regulators such as the Financial Conduct Authority (FCA) also have powers to challenge unfair terms or seek injunctions preventing traders from enforcing them.
How to Identify an Unfair Term
A contract term is potentially unfair if it:
- creates excessive costs or penalties for consumers (e.g. disproportionate cancellation charges);
- allows the trader to change key terms unilaterally, such as price or the nature of goods or services, without justification;
- limits the consumer's legal rights or remedies unfairly;
- binds consumers to terms that are hidden, unclear or inconsistent with the contract as a whole.
The CRA and associated guidance (such as the CMA's unfair contract terms guidance) provide example terms that may be interpreted as unfair, but the decision on fairness always depends on the contract as a whole and the circumstances at the time it was agreed.
Steps to Challenge an Unfair Contract Term
Step 1 - Review Relevant Legislation and Contract Terms
Check whether the term in question is covered by the CRA or older legislation (UTCCRs). Identify where in the contract the term appears, its legal effect, and whether it falls into an exempt category (such as clear pricing or core terms).
Terms must be assessed for fairness and transparency; if wording is ambiguous or hidden, this may support a challenge.
Step 2 - Raise the Issue with the Trader
Begin by writing to the trader, explaining why you believe the term is unfair and asking for it to be removed or amended. This formal complaint should refer to the statutory basis for unfair terms and include any supporting evidence about the imbalance the term creates.
If money has been charged or withheld due to the term, state clearly the remedy you seek (for example, a refund or contract adjustment). Early negotiation can sometimes resolve the issue without litigation.
Step 3 - Report to Regulators
If the trader refuses to engage or to change the term, you can report the issue to an enforcement body such as:
- the Competition and Markets Authority (CMA); and
- the local Trading Standards office.
These bodies can investigate widespread use of unfair terms and take enforcement action, including seeking injunctions to prevent continued use.
Step 4 - Litigation or Defence in Court
If private negotiation and regulatory reporting do not resolve the matter, the next step may be:
- Defending a claim where the trader attempts to enforce an unfair term;
- or bringing a court claim to have the term declared unenforceable.
Only a court can ultimately decide on fairness, and a successful challenge will render the term unenforceable against you. The rest of the contract usually remains in force if it still makes commercial sense without the unfair term.
Remedies for Unfair Contract Terms
Unenforceability of the Term
The primary consequence of a successful challenge is that the unfair term is not binding on the consumer. The rest of the contract will continue unless it collapses without the term.
Compensation or Adjustments
If the unfair term led to financial loss (for example, payment of an excessive cancellation fee), you may seek damages or restitution through the courts after the term is struck down.
Regulatory Action
Enforcement bodies can pursue court orders to prevent businesses from continuing to use unfair terms and sometimes seek wider remedies that protect other consumers.
Common Questions
Do all contracts allow challenges to unfair terms?
The statutory protections under the CRA apply only to consumer contracts. Contracts between two businesses (B2B) are generally subject to different tests and do not benefit from the CRA's unfair terms regime.
Can a term be unfair even if I agreed to it?
Yes. Standard terms can be challenged as unenforceable even if the consumer signed the contract or indicated agreement, provided they meet the statutory definition of unfairness.
What if the term is central to the contract?
Core terms setting the main subject matter or price of a contract are exempt from the fairness test if they are clear and transparent. They cannot be challenged as unfair simply because you find them unfavourable as long as they meet those criteria.
Key Takeaways
Challenging unfair contract terms in England and Wales involves understanding your rights under the Consumer Rights Act 2015 and earlier regulations for older contracts. A term may be unfair if it creates an unreasonable imbalance to your detriment and is not a clear, prominent part of the contract. You can start by identifying the term and raising the issue with the trader, then escalate to regulatory bodies such as the CMA or, in the end, to a court to have the term declared unenforceable. Remedies can include unenforceability, refunds or compensation, and regulatory action to stop widespread unfair practices.
