|
No. 1 of 2006 |
AN ACT FOR THE REGULATION OF
UNFAIR TERMS |
IN CONSUMER CONTRACTS AND RELATED
MATTERS |
[Date of Assent : — 6th
February, 2006] |
Enacted by the Parliament of The
Bahamas. |
1.(1) This Act may be cited as the
Unfair Terms in Consumer Contracts Act, 2006. | Short title and commencement. |
(2) This Act shall come operation
on such day as the Minister may, by notice published in the Gazette, appoint. |
| Interpretation. |
"business" includes a trade or
profession and the activities of any government department or local or public
authority; |
"consumer" means a natural person who,
in making a contract to which this Act applies, is acting for purposes which
are outside his business; |
"court" means the Supreme Court; |
"Minister" means the Minister
responsible for Consumer Protection; |
"seller" means a person who sells goods
and who, in making a contract to which this Act applies, is acting for purposes
relating to his business; |
"supplier" means a person who supplies
goods or services and who, in making a contract to which this Act applies, is
acting for purposes relating to his business. |
3.(1) Subject to the provisions of
the First Schedule, this Act applies to any term in a contract concluded between
a seller or supplier and a consumer where such term has not been individually
negotiated. | Terms to which this Act applies. First Schedule. |
(2) In so far as it is in plain,
intelligible language, no assessment shall be made of the fairness of any term
which - |
(a) defines the main subject matter
of the contract, or |
(b) concerns the adequacy of the price
or remuneration, as against the goods or services sold or supplied. |
(3) For the purposes of this Act,
a term shall always be regarded as not having been individually negotiated
where it has been drafted in advance and the consumer has not been able to
influence the substance of the term. |
(4) Notwithstanding that a
specific term or certain aspects of it in a contract has been individually
negotiated, this Act shall apply to the rest of a contract if an overall
assessment of the contract indicates that it is a pre-formulated standard
contract. |
(5) It shall be for any seller or
supplier who claims that a term was individually negotiated to show that it was
so negotiated. |
4.(1) In this Act, subject to
subsections (2) and (3), "unfair term" means any term which contrary
to the requirement of good faith causes a significant imbalance in the parties'
rights and obligations under the contract to the detriment of the consumer. | Unfair terms. |
(2) An assessment of the unfair
nature of a term shall be made taking into account the nature of the goods or
services for which the contract was concluded and referring, as at the time of
the conclusion of the contract, to all circumstances attending the conclusion
of the contract and to all the other terms of the contract or of another
contract on which it is dependent. |
(3) In determining whether a term
satisfies the requirement of good faith, regard shall be had in particular to
the matters specified in the Second Schedule. | Second Schedule. |
(4) The Third Schedule contains an
indicative and non-exhaustive list of the terms which may be regarded as
unfair. | Third Schedule. |
5.(1) An unfair term in a contract
concluded with a consumer by a seller or supplier shall not be binding on the
consumer. | Consequence of inclusion of unfair
terms in contracts. |
(2) The contract shall continue to
bind the parties if it is capable of continuing in existence without the unfair
term. |
6. A seller or supplier shall
ensure that any written term of a contract is expressed in plain, intelligible
language, and if there is doubt about the meaning of a written term, the
interpretation most favourable to the consumer shall prevail. | Construction of written contracts |
7.(1) The Minister may consider any
complaint made to him that any contract term drawn up for general use is
unfair, unless the complaint appears to the Minister to be frivolous or
vexatious. | Prevention of continued use of
unfair terms. |
(2) If having considered a
complaint about any contract term pursuant to paragraph (1) the Minister
considers that the contract term is unfair he may, if he considers it
appropriate to do so, refer the matter to the Attorney-General to bring
proceedings for an injunction (in which proceedings the Attorney-General may
also apply for an interlocutory injunction) against any person appearing to him
to be using or recommending use of such a term in contracts concluded with
consumers. |
(3) The Minister may, if he
considers it appropriate to do so, have regard to any undertakings given to him
by or on behalf of any person as to the continued use of such a term in
contracts concluded with consumers. |
(4) The Minister shall give
reasons for his decision to apply or not to apply, as the case may be, for an
injunction in relation to any complaint which this Act require him to consider. |
(5) The court may, on an
application by the Attorney-General grant an injunction on such terms as it
thinks fit. |
(6) An injunction may relate not
only to use of a particular contract term drawn up for general use but to any
similar term, or a term having like effect, used or recommended for use by any
party to the proceedings. |
(7) The Minister may arrange for
the dissemination in such form and manner as he considers appropriate of such
information and advice concerning the operation of this Act as may appear to
him to be expedient to give to the public and to all persons likely to be
affected by this Act. |
8. This Act shall apply to
contracts entered into before, on or after this Act comes into operation. | Application. |
(Section 3 (1)) |
FIRST SCHEDULE |
Contracts and Particular Terms Excluded |
from the Scope of this Act |
This Act does not apply to - |
(a) any contract relating to
employment; |
(b) any contract relating to
succession rights; |
(c) any contract relating to rights
under family law; |
(d) any contract relating to the
incorporation and organisation of companies or partnerships; |
(e) any term incorporated in order to
comply with or which reflects - |
(i) statutory or regulatory
provisions of The Bahamas; or |
(ii) the provisions or principles of
international conventions to which The Bahamas is party. |
(Section 4 (3)) |
SECOND SCHEDULE |
Assessment of Good Faith |
In making an assessment of
good faith, regard shall be had in particular to - |
(a) the strength of the bargaining
positions of the parties; |
(b) whether the consumer had an
inducement to agree to the term; |
(c) whether the goods or services
were sold or supplied to the special order of the consumer; and |
(d) the extent to which the seller or
supplier has dealt fairly and equitably with the consumer. |
(Section 4 (4)) |
THIRD SCHEDULE |
Indicative and Illustrative List of Terms |
which may be Regarded as Unfair |
1. Terms which have the object
or effect of - |
(a) excluding or limiting the legal
liability of a seller or supplier in the event of the death of a consumer or
personal injury to the latter resulting from an act or omission of that seller
or supplier; |
(b) inappropriately excluding or
limiting the legal rights of the consumer vis-à-vis the seller or supplier or
another party in the event of total or partial non-performance or inadequate
performance by the seller or supplier of any of the contractual obligations,
including the option of offsetting a debt owed to the seller or supplier
against any claim which the consumer may have against him; |
(c) making an agreement binding on
the consumer whereas provision of services by the seller or supplier is subject
to a condition whose realisation depends on his own will alone; |
(d) permitting the seller or supplier
to retain sums paid by the consumer where the latter decides not to conclude or
perform the contract, without providing for the consumer to receive
compensation of an equivalent amount from the seller or supplier where the
latter is the party cancelling the contract; |
(e) requiring any consumer who fails
to fulfil his obligation to pay a disproportionately high sum in
compensation; |
(f) authorising the seller or
supplier to dissolve the contract on a discretionary basis where the same
facility is not granted to the consumer, or permitting the seller or supplier
to retain the sums paid for services not yet supplied by him where it is the
seller or supplier himself who dissolves the contract; |
(g) enabling the seller or supplier to
terminate a contract of indeterminate duration without reasonable notice except
where there are serious grounds for doing so; |
(h) automatically extending a contract
of fixed duration where the consumer does not indicate otherwise, when the
deadline fixed for the consumer to express this desire not to extend the
contract is unreasonably early; |
(i) irrevocably binding the consumer
to terms with which he had no real opportunity of becoming acquainted before the
conclusion of the contract; |
(j) enabling the seller or supplier
to alter the terms of the contract unilaterally without a valid reason which is
specified in the contract; |
(k) enabling the seller or supplier
to alter unilaterally without a valid reason any characteristics of the product
or service to be provided; |
(l) providing for the price of goods
to be determined at the time of delivery or allowing a seller of goods or
supplier of services to increase their price without in both cases giving the
consumer the corresponding right to cancel the contract if the final price is
too high in relation to the price agreed when the contract was concluded; |
(m) giving the seller or supplier the
right to determine whether the goods or services supplied are in conformity
with the contract, or giving him the exclusive right to interpret any term of
the contract; |
(n) limiting the seller's or
supplier's obligation to respect commitments undertaken by his agents or making
his commitments subject to compliance with a particular formality; |
(o) obliging the consumer to fulfil
all his obligations where the seller or supplier does not perform his; |
(p) giving the seller or supplier the
possibility of transferring his rights and obligations under the contract,
where this may serve to reduce the guarantees for the consumer, without the
latter's agreement; |
(q) excluding or hindering the
consumer's right to take legal action or exercise any other legal remedy,
particularly by requiring the consumer to take disputes exclusively to
arbitration not covered by legal provisions, unduly restricting the evidence
available to him or imposing on him a burden of proof which, according to the
applicable law, should lie with another party to the contract. |
2. Scope of sub-paragraphs (g),
(j) and (1) of paragraph 1. |
(a) Sub-paragraph (g) is without
hindrance to terms by which a supplier of financial services reserves the right
to terminate unilaterally a contract of indeterminate duration without notice
where there is a valid reason, provided that the supplier is required to inform
the other contracting party or parties thereof immediately. |
(b) Sub-paragraph (j) is without
hindrance to terms under which a supplier of financial services reserves the
right to alter the rate of interest payable by the consumer or due to the
latter, or the amount of other charges for financial services without notice
where there is a valid reason, provided that the supplier is required to inform
the other contracting party or parties thereof at the earliest opportunity and
that the latter are free to dissolve the contract immediately. |
Sub-paragraph (j) is also without hindrance to
terms under which a seller or supplier reserves the right to alter unilaterally
the conditions of a contract of indeterminate duration, provided that he is
required to inform the consumer with reasonable notice and that the consumer is
free to dissolve the contract. |
(c) Sub-paragraphs (g), (j) and (1)
do not apply to - |
(i) transactions in transferable
securities, financial instruments and other products or services where the
price is linked to fluctuations in a stock exchange quotation or index or a
financial market rate that the seller or supplier does not control; and |
(ii) contracts for the purchase or
sale of foreign currency, traveller's cheques or international money orders
denominated in foreign currency. |
(d) Sub-paragraph (1) is without
hindrance to price indexation clauses, where lawful, provided that the method
by which prices vary is explicitly described. |