Unfair terms in Irish contract law
Unfair terms in Irish contract law generally refer to terms in contracts that provide an unreasonable imbalance, usually to the detriment of the consumer, in consumer and other contracts. These unfair terms are provided by common law and more recent statute, most notably Consumer Protection Act 2007 and the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995.
Consumer Protection Act 2007
The Consumer Protection Act 2007 prohibits numerous unfair practices regarding the formation and implementation of contracts, such as misleading pricing, misleading advertising, aggressive practices and deceptive practices, et al. Most notably, Part 3: Commercial Practices covers:- Chapter 1: Unfair Commercial Practices
- Chapter 2: Misleading Commercial Practices
- Chapter 3: Aggressive Commercial Practices
- Chapter 4: Prohibited Commercial Practices
European Communities (Unfair Terms in Consumer Contracts) Regulations, 1995
The above regulations make general provisions between a seller of goods and a supplier of services in a commercial setting and where the contract was not individually negotiated.The regulations lay out what are unfair terms in contracts, those that are unenforceable, good-faith tests and misleading commercial practices.
A non-exhaustive list of unfair terms in consumer contracts provided by Schedule 3 would be terms which have the object or effect of:
Penalty clauses
Although generally prohibited through the Consumer Protection Act, through inheriting the common law of England and Wales, Irish common law also contains provisions against penalty clauses in contracts. This has been most recently upheld via the following case law:- ACC Bank plc v Friends First Management Pension Funds Limited
- Flynn & Anor v Breccia IECA 273
- Sheehan v Breccia & Ors IECA 286