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Contract: Rules and Theory

Freedom of contract and consumer protection

  • 3 things to know
  • A2 Units 3 and 4

Overview

How consumer protection legislation cuts across freedom of contract, strongest justification for overriding freedom of contract in consumer transactions and strongest argument against extending consumer protection further.

What you need to know

Answer each one before you reveal it.

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Key term

How does the Consumer Rights Act 2015 define a consumer?

Numbers

Which statute now governs unfair terms in consumer contracts, and which governs them between businesses?

Key term

State the fairness test applied to a consumer contract term under section 62 of the Consumer Rights Act 2015.

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    Why does the classical model of contract fail to protect consumers adequately?

    Model answer

    It assumes two informed parties of comparable strength negotiating terms, whereas a consumer usually faces a repeat trader's standard form, has far less information and no realistic power to change any of it.

  2. 2

    How does the Consumer Rights Act 2015 define a consumer?

    Model answer

    A consumer is an individual acting for purposes that are wholly or mainly outside that individual's trade, business, craft or profession.

  3. 3

    How does the Consumer Rights Act 2015 define a trader?

    Model answer

    A trader is a person acting for purposes relating to that person's trade, business, craft or profession, whether personally or through someone acting on their behalf.

  4. 4

    Which statute now governs unfair terms in consumer contracts, and which governs them between businesses?

    Model answer

    The Consumer Rights Act 2015 governs consumer contracts, while the Unfair Contract Terms Act 1977 continues to govern contracts between businesses.

  5. 5

    When did the Consumer Rights Act 2015 take effect?

    Model answer

    It came into force on 1 October 2015, and it applies to consumer contracts made on or after that date.

  6. 6

    State the fairness test applied to a consumer contract term under section 62 of the Consumer Rights Act 2015.

    Model answer

    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, and an unfair term does not bind the consumer.

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AThe defendant owed the victim a duty of care and breached it.
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Pecuniary loss is financial and measurable.
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