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FCA publishes undertaking on unfair contract term

On 9th May, the FCA published an undertaking by James Brearley & Sons Limited in relation to a term in their Services Terms and Conditions which allowed them to terminate their contract with their customers without notice.

The term stated “We may terminate our Agreement to provide services under these Terms and Conditions by providing you with written notice at any time. We can terminate the Agreement for any reason. You can terminate your agreement to these Terms and Conditions by notifying us in writing.”

The FCA considered that this term was in breach of section 62(4) of the CRA and Regulation 5(1) of the UTCCRs because it was “…contrary to the requirement of good faith” and it caused a “significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer.”

Through the undertaking, the term has been removed with the effect that James Brearley now must give 20 business days’ notice of termination.

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Caroline Stevenson