Ten years on from the introduction of the Consumer Rights Act 2015 (the CRA), the Competition and Markets Authority (the CMA) is revising its current guidance on unfair contract terms.
The draft guidance is aimed at making the guidance more accessible, helping businesses better understand and comply with the CRA. The consultation closed on 19 March 2026. Once finalised, it will replace the existing guidance on unfair contract terms.
Which terms are unfair?
Contract terms are unfair if they tilt the rights and responsibilities excessively in favour of the supplier. The law currently uses a ‘fairness test’ by looking at the words in the contract, taking into consideration what is being sold, how a term relates to other terms in the contract, and all the circumstances at the time the term was agreed.
Certain terms and notices giving rise to particular concerns are ‘blacklisted’ and deemed as unsuitable for use with consumers. These include terms that exclude or restrict liability for death or personal injury resulting from negligence, a consumer’s statutory rights and any associated remedies. Blacklisted terms are never enforceable against a consumer.
What are the key changes in the draft guidance?
Enhanced CMA enforcement powers under the DMCC:
The updated guidance integrates the Digital Markets, Competition and Consumer Act 2024 (the DMCC), enabling the CMA to impose penalties without going to court for businesses that use prohibited, non-transparent or unfair terms or notices. Fines may be up to 10% of a company’s global turnover or £300,000 (whichever is higher).
Transparency – more than words:
Transparency now covers not just the content itself, but also its presentation by requiring clear fonts and headings that follow a logical structure, supported by explanation of terms which may be complex or challenging to understand.
Fairness and consumer behaviour:
The requirement of ‘good faith’ should include a behavioural dimension. Suppliers must consider consumer psychology and avoid exploiting consumer biases — for instance, consumers’ tendency not to read standard terms thoroughly, or to underestimate future costs such as renewal or termination fees. Campaigns emphasising quick benefits, such as a free trial, while using tactics to minimise attention as to future costs will face greater scrutiny. Automatic renewal of subscriptions are also specifically noted as an area of concern, with the DMCC’s new subscription provisions (to enter into force no later than August 2026) adding further obligations.
The role of advertising:
Advertising is explicitly incorporated into the fairness assessment, requiring consistency between terms and marketing claims. Small print which removes or curtails more prominent claims, failing to highlight key terms during the marketing process, or inconsistency between marketing claims and the contract terms could give rise to an unfair commercial practices. Statements made by a supplier that a consumer is likely to see may also be treated as terms of the contract.
Exclusions and variations to the contract:
Vague language such as “liability is excluded so far as the law permits” will not remedy an unfair clause; and terms allowing a supplier to vary terms such as changing the description or price of the services or goods may now be deemed unfair should they be overly wide in scope or result in changes that may be unexpected to the customer.
What are the key takeaways for consumer businesses?
The draft guidance makes clear that unfair, onerous or significantly unbalanced terms will be closely scrutinised. Suppliers should ensure that lines of communication with customers are clear, transparent and user-friendly to understand.
Contract terms should similarly be reviewed to make sure that they strike a reasonable balance without prejudicing consumers by including reasonable protections around cancellation or refund rights.
For more information on how the new guidance will impact your consumer contracts, contact Sacha Wilson and Jacky Lai.
Sacha advises clients from a variety of sectors, including some of the world’s best known brands, agencies and platforms. He is ranked for advertising and digital media in both The Legal 500 and Chambers and Partners and is recognised as one of the UK’s leading advertising lawyers.
Sacha advises on a range of commercial transactions and has particular expertise in advertising-related agreements (such as creative agency, media planning and buying, production and brand partnerships). He is particularly well known for his expertise in digital marketing and adtech.
Sacha also has expertise in general advertising compliance (including prize promotions, native advertising and influencer marketing) as well as ecommerce and online consumer regulations.
Sacha also works within the firm’s retail and technology practices and regularly advises well-known retail brands on a range of retail-focused commercial agreements including distribution, licensing, and franchise agreements, as well as clients across a range of industries on tech focused agreements such as software development, SaaS, and IT services contracts.
In relation to data privacy, Sacha has advised on all the key compliance areas, and has worked with a large number of clients on their data protection compliance programmes. He has particular expertise in the data privacy aspects of marketing, adtech and digital media. He frequently advises on the compliance aspects of adtech vendor arrangements, programmatic advertising, and mobile apps.
Sacha also has expertise in the legal issues associated with AI, particularly in the context of advertising and marketing. He regularly advises clients on the privacy, IP, contractual and regulatory issues associated with the use and deployment of AI for a range of purposes in the advertising and marketing industries.
Jacky has acted for clients ranging from leading global multinationals to early-stage companies across sectors such as retail, IT, healthcare, energy and financial services.
He has particular experience in technology focused contracts (IT services, software development and licensing, SaaS, SLAs, supply, manufacturing and distribution agreements, white label and collaboration agreements).
Jacky has advised on a variety of non-contentious IP issues (including source code licensing, open source software, assignment and infringement). He also advises corporate buyers and sellers in M&A transactions and data protection matters (drafting privacy notices, compliance policies and data subject access requests (DSAR)).
Jacky supports clients by providing training to legal teams and working with key stakeholders in creating internal policies and best practices to navigate the evolving regulatory landscape on key areas such as the EU Digital Operational Resilience Act (DORA), GDPR and AI.
Jacky trained at DLA Piper, where he completed a secondment to Unilever advising on a wide range of commercial, sports sponsorships and endorsements, advertising and IP matters. Jacky also worked in-house at a leading US private equity backed software and payments company where he acted on various supply of goods and services, payment, technology litigation and AI matters.