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Sale & purchase

Regulations on unfair terms in property sale contract

regulations-on-unfair-terms-in-property-sale-contractAccording to Unfair Terms in Consumer Contracts Regulations Act, all contracts should be drafted in plain English. The buyer has the right to challenge terms that are not individually negotiated between the parties (but included in the contract) on charges that are unfair.

Such regulations do not apply to transactions between private buyers and private sellers, and on commercial leases between a landlord who is in business and the tenant who is also in business. These regulations are also not applicable for the following conveyancing transactions:

  • Sale of a new house by the seller/developer to a private buyer;
  • Tenancy agreement between a landlord who is in business and the tenant who is a private individual;
  • Mortgages where the lender is acting in the course of his business and the borrower who acting as a private individual;
  • Sale by a lender to a private individual.

Under such circumstances, the burden of proving unfairness lies on the buyer. Usually, a term or condition is deemed unfair when it is said to be contrary to good faith and causes imbalance in the party’s rights and obligations. When the term is deemed unfair, that particular term is considered void, and both parties can carry on with the rest of the contract as long as it is capable of continuing without the offending term.

Photo courtesy: pandrcutts



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