Lloyd's Maritime and Commercial Law Quarterly
THE FIRST UNFAIR TERM: FAREWELL TO CAVEAT EMPTOR?
Director General of Fair Trading
v. First National Bank
The Court of Appeal has, for the first time, considered whether a contractual term is an unfair term within the Unfair Terms in Consumer Contracts Regulations 1994,1
which implemented Council Directive (EEC) 93/13.2
The decision in Director General of Fair
1. SI 1994/3159. The 1994 Regulations have been revoked and replaced by the Unfair Terms in Consumer Contracts Regulations 1999, SI 1999/2083. The 1999 Regulations are substantively similar to the 1994 Regulations. The stated purpose behind the replacement was to “reflect the text of the Directive even more closely than before” and to alter the enforcement of the Regulations (see issue 8 of the Unfair Contract Terms Bulletin, December 1999). The 1994 Regulations provided only the Director General with the power to take injunctive action against terms he considered unfair. In the 1999 Regulations, this power is provided to certain public authorities (most national regulatory bodies and all local authority trading standards departments) and a power reserved for independent bodies (at present, only the Consumers’ Association). See 1999 Regulations, Sched. 1.
2. OJ 1993 L95 p. 29. With regard to the 1994 Regulations generally, see J.Beatson, “European Law and Unfair Terms in Consumer Contracts” [1995] C.L.J. 235; R.Brownsword and G.Howells, “The Implementation of the EC Directive on Unfair Terms in Consumer Contracts—Some Unresolved Questions” [1995] J.B.L. 243; H.Collins, “Good Faith in European Contract Law” (1994) 14 O.J.L.S. 229; F.M.B.Reynolds, “Unfair Contract Terms” (1994) 110 L.Q.R. 1; and E.Macdonald “The Emperor’s Old Clauses: Unincorporated Clauses, Misleading Terms and the Unfair Terms in Consumer Contracts Regulations” [1999] C.L.J. 413.
CASE AND COMMENT
463