Guide

Write consumer-friendly terms and conditions

How to write consumer contracts that are legally compliant and enforceable. Covers the transparency requirement under the Consumer Rights Act 2015, terms to avoid from the Schedule 2 grey list, pre-ticked box rules, and practical drafting guidance for small businesses.

Manufacturing & EngineeringRetail & Consumer Goods UK-wide

Many small businesses use terms and conditions copied from online sources or generated by generic tools without checking whether those terms comply with UK consumer protection law. A term that is unfair is not binding on the consumer — even if they signed the contract — and can expose you to enforcement action by Trading Standards or the Competition and Markets Authority (CMA).

This guide walks you through what your consumer contracts must include, what they must not include, and how to draft the grey-area terms (cancellation, variation, liability) in a way that is both fair and commercially useful.

This guide applies to consumer contracts only — contracts with individuals acting outside their trade or business. Business-to-business contracts are governed by different rules and allow more flexibility in limiting liability and excluding obligations.

When this applies to you

You need compliant consumer terms if you sell goods, services, or digital content to members of the public, including:

  • Retail businesses (in-store, online, or both)
  • Tradespeople and service providers (builders, hairdressers, plumbers, tutors)
  • Hospitality businesses (accommodation, events)
  • Online sellers and subscription businesses
  • Digital content providers (apps, software, downloads, streaming)

If your customers are exclusively businesses, this guide does not apply, but be aware that sole traders and partnerships buying for personal use may be treated as consumers in some circumstances.

Step 1: Understand what the law requires

Part 2 of the Consumer Rights Act 2015 governs unfair terms in consumer contracts. The central rule is that 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 consumer's detriment. Unfair terms are void.

The Act also requires all written consumer contract terms to be transparent: expressed in plain and intelligible language, legible, and brought to the consumer's attention appropriately before they commit.

What transparency means in practice

When drafting or reviewing your terms, apply these four checks to every clause:

  1. Language: Could an ordinary person who is not a lawyer understand this clause without rereading it? Rewrite any double negatives, passive constructions, or legal jargon.
  2. Structure: Are the most important terms (price, cancellation, limitation of liability) easy to find? Use clear headings and logical order.
  3. Timing: Does the consumer see the terms before they commit? For online sales, key terms must appear on or before the order confirmation page — not only in a PDF linked in the footer.
  4. Format: Are the terms legible? Very small font, light grey text on white, or dense blocks of unbroken text may not satisfy the legibility requirement.

The interpretation rule (s.69): If any term in your contract is capable of being understood in more than one way, the courts will apply the meaning most favourable to the consumer. Ambiguity in your terms works against you, not the consumer.

Step 2: Identify and remove or justify grey-list terms

Schedule 2 of the CRA 2015 contains a list of 20 types of terms that may be unfair. A term falling into one of these categories is not automatically void, but it triggers a presumption of unfairness. If challenged by a consumer, Trading Standards, or the CMA, you would need to justify why the term is fair in your specific context.

Work through the list below and identify any of your current terms that match. For each one, decide whether to remove it, rewrite it in a fairer form, or document your justification for keeping it.

The four grey-list categories most commonly found in small business terms

Cancellation and termination (items 4, 5, 6, 7)

These are the most frequently challenged terms. Common problem versions, and safer alternatives:

  • Problem: "All deposits are non-refundable in all circumstances."
    Safer: "If you cancel more than [X days] before the service date, we will refund your deposit in full. If you cancel within [Y days], we will retain the deposit to cover costs we have already incurred."
  • Problem: "We may cancel your order at any time without notice or compensation."
    Safer: "We may cancel your order if we are unable to fulfil it, in which case we will give you as much notice as possible and provide a full refund within 14 days."
  • Problem: "We require 90 days' written notice to cancel a rolling subscription."
    Safer: "You may cancel at any time. If you cancel before your next renewal date, your access continues until that date and you will not be charged again."

Variation of terms, price, and product (items 10, 11, 12)

These terms allow you to change what you offer or what you charge. They are commercially understandable but legally risky without proper safeguards:

  • Problem: "We may amend these terms at any time without notice."
    Safer: "We may update these terms with at least 30 days' written notice. If you do not accept the change, you may cancel without penalty before the change takes effect."
  • Problem: "Prices are subject to change without notice."
    Safer: "If we increase the price of your subscription, we will give you at least 30 days' notice and the right to cancel before the increase applies."

Limitation of liability (item 2)

You cannot exclude liability for death or personal injury caused by negligence (s.65 — this is an absolute blacklist rule, not merely grey-list). You also cannot exclude your statutory duties under Part 1 of the CRA 2015. Beyond those hard limits, you can limit liability for consequential or indirect losses, but only if the term is transparent, reasonable, and proportionate to the contract value:

  • Problem: "We accept no liability for any losses, direct or indirect, arising from our services."
    Safer: "Our liability to you for losses arising from our services is limited to the amount you paid us for the specific service that caused the loss. This does not affect your statutory rights."

Restricting legal remedies (items 17, 19)

Terms that require consumers to use your internal complaints process as a condition of pursuing any other remedy, or that make arbitration compulsory, are likely to be unfair:

  • Problem: "All disputes must be resolved through our internal complaints procedure before any other action may be taken."
    Safer: "We operate a complaints procedure [link]. We encourage you to contact us first, but this does not affect your statutory rights or your right to contact Trading Standards or pursue court action."

Step 3: Handle pre-ticked boxes correctly

If your sales process includes optional add-ons, upgrades, insurance, or any charge beyond the core price, you must obtain the consumer's express, active consent before charging for them. Pre-ticked boxes and opt-out mechanisms do not constitute consent under the Consumer Contracts Regulations 2013.

What this means for your checkout or order process

  • Any additional product (travel insurance, extended warranty, gift wrapping, priority delivery) must start as an unticked option.
  • Do not bundle multiple optional items together and pre-tick the bundle. Each additional charge needs its own consent.
  • If a consumer contacts you to cancel an additional service they did not actively select, you must refund the charge in full.
  • Review your online checkout flow every time you add a new optional extra.

Step 4: Make sure your terms cannot exclude statutory rights

Some terms are absolutely void regardless of how they are drafted, what the consumer agreed to, or what the contract says. You should check for these and remove them if present:

  • No-refunds clauses: Any term stating 'no refunds under any circumstances' or 'all sales are final' is void in relation to statutory rights. You can say this in relation to non-faulty, change-of-mind returns — but must make clear it does not affect rights under the Consumer Rights Act.
  • Liability exclusions for death and personal injury: Entirely unenforceable (s.65 CRA 2015). Remove any such clause from your terms.
  • Clauses requiring consumers to waive rights in advance: For example, 'by purchasing you agree to accept repair as your only remedy for any fault' is void — you cannot make a consumer waive the 30-day right to reject before the 30 days has passed.
  • Requiring original packaging for statutory returns: Not a lawful condition of exercising statutory rights. You can require original packaging for voluntary change-of-mind returns, but not for returns of faulty goods.

Step 5: Include what must be there

Beyond avoiding unfair terms, your consumer contracts must include certain mandatory information and statements. For distance and online sales, this includes the 24-item pre-contract information list under the Consumer Contracts Regulations 2013. For all consumer contracts, the following are good practice and in many cases legally required:

  • Your legal name and address: Not just a trading name or PO box. Use your registered business address (if limited company or LLP) or your full name and business address (if sole trader or partnership).
  • A description of what you are providing: Specific enough that the consumer knows what they are buying. Vague descriptions can expose you to 'as described' claims.
  • The total price, including all taxes and charges: For online sales, this must be shown before the consumer is bound. No hidden charges may be added at checkout or on delivery.
  • Cancellation rights and your returns policy: Set out clearly when consumers can cancel or return, what they are entitled to, and how to do it. For online sales, include the model cancellation form or a direct link to it.
  • How disputes are resolved: Include your complaints procedure and any ADR (Alternative Dispute Resolution) scheme you participate in. You are not required to use ADR, but must tell consumers whether you will or will not.
  • A statement that statutory rights are not affected: Add a standard footer to your terms: 'These terms do not affect your statutory rights under the Consumer Rights Act 2015.'

Step 6: Review periodically

Consumer protection law changes. Key dates to be aware of:

  • 6 April 2025: The Digital Markets, Competition and Consumers Act 2024 gave the CMA power to fine businesses directly up to 10% of worldwide annual turnover without going to court. The DMCC Act also strengthened rules on drip pricing (adding mandatory charges progressively through checkout) and subscription contracts.
  • Subscription contracts: The DMCC Act 2024 introduced enhanced cooling-off rights at annual renewal points for subscriptions. Review your subscription terms if you have not done so since April 2025.

Review your consumer terms at least annually, and whenever you change your product range, pricing structure, or sales channels.

  1. Audit existing terms against the grey list

    Work through the 20 grey-list types in Schedule 2 of the CRA 2015 and identify any terms in your current contracts that match. Mark each for removal, rewrite, or documented justification.

  2. Apply the plain language test to every clause

    Read each clause aloud as if you were a customer with no legal background. If you have to read it twice to understand it, rewrite it. Remove double negatives and passive constructions.

  3. Check that your terms do not exclude statutory rights

    Remove any no-refund clauses, liability exclusions for death and personal injury, or advance waivers of statutory rights. Add a standard footer confirming statutory rights are not affected.

  4. Audit your checkout for pre-ticked boxes

    Review your online checkout or order process. Any optional extra that starts as pre-ticked or pre-selected must be changed to an unticked default. Test on mobile as well as desktop.

  5. Verify all mandatory information is present

    Check your terms include your legal name and address, a description of what you provide, total price inclusive of all charges, cancellation policy, and complaints procedure.

  6. Display terms before the consumer commits

    For online sales, ensure your terms link is visible and accessible before the consumer reaches the order confirmation step — not only in a footer or post-purchase email.

  7. Seek legal review if your contracts are complex

    If you use long-term service contracts, high-value bespoke agreements, or subscription products with complex pricing, seek advice from a solicitor with consumer law experience before relying on template terms.

Avoiding unfair terms in consumer contracts

Part 2 of the Consumer Rights Act 2015 controls which terms in consumer contracts are enforceable. Many traders unwittingly use terms that a court or the CMA would find unfair - and those terms are void even if the consumer signed them.

Read guide