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These Regulations revoke the 1994 Regulations of the same name; the 1994 Regulations were enacted to incoporate EU legislation on consumer protection.

For these Regulations to apply, one of the parties to a Contract must be dealing as a consumer, and the terms of the contract must not have been explicitly negotiated.

In outline, the Regulations allow a clause to be struck out if it it is 'unfair' (see below), or significantly imbalances the rights or responsibilities of the parties with the detriment to the consumer. Examples of 'unfair' terms will include:

• terms authorizing the business to dissolve the contract when the same right is not extended to the consumer;

• terms authorizing the business to retain money paid by the consumer if the business does not fulfil its obligations;

• terms authorizing the termination of a contract of undefined duration without adequate notice;

• terms restricting the right of the consumer to take legal action.

In addition, the Regulations stipulate that contract clauses that are not expressed in plain language will be construed to the benefit of the consumer.

See: Exclusion clause