Many people think that if they have a contract with a person, and that person acts unfairly in performing the contract, that this gives them a legal claim. This is not generally the case, but the position is different depending on whether it is two businesses that have a contract, or a business and a consumer.
Where Two Businesses Have a Contract
In English law, where two businesses have a contract, there has never been a broad obligation for the parties to that contract to act in “good faith”. The Court of Appeal restated that this was still the position as recently as July 2016.
Therefore if you are a business with a contract with another business, just because they may have acted “unfairly” in your view, and you may even think their “unfairness” has caused you loss, it is important to realise that this will not necessarily give you any legal remedy. The situation would need to be assessed to see if there has likely been a breach of contract that the law would recognise as a claim.
Where a Business and a Consumer Have a Contract
Where a consumer has a contract with a business, since 1st October 2015 the consumer has been able to attack a term of the contract as unfair under the Consumer Rights Act 2015 (“CRA”). If the consumer can show it is unfair then the term will not bind them. In order to do so, the consumer needs to show that the term, contrary to the requirement of good faith, causes a significant imbalance in the rights and obligations under the contract, to the consumer’s detriment. Consumers were able to do this before 1st October 2015, but under different legislation.
It is important to realise however that this is not the same as having a legal claim that the business has acted “unfairly” generally. The consumer will more likely use the CRA in this regard as a defence to the business’ enforcement of an “unfair” term.
If you are considering bringing a claim in contract, either as a business or a consumer, it is important to be able to identify the obligation under the contract the other party has breached (even more important that the obligation actually exists!), and what you say this entitles you to. A good lawyer can help you with this. If you need advice and assistance Quality Solicitors Davisons’ litigation team can help you with a variety civil disputes. Please call us on 0121 685 1248.