Consumer terms and conditions: why are they so long and complicated?

Exams have finished and you’ve booked a holiday somewhere sunny.

Being sensible, you look for travel insurance. To your dismay, you notice that some of the policies are long, complex and full of baffling legal jargon.

You wouldn’t be the first to wonder why terms and conditions are so long and confusing. The T&Cs of consumer brands often exceed 20,000 words, making them longer than many of Shakespeare’s plays. It is always recommended to read T&Cs carefully to ensure that there’s nothing unexpected in the small print, but somewhat unsurprisingly, most people do not read T&Cs before accepting them.

So why are consumer T&Cs so lengthy? One reason is simply that a complex product – such as insurance – needs a detailed explanation to ensure that the consumer understands what they are signing up for. Businesses also use T&Cs to communicate information they are legally obliged to provide.

Melanie Shefford, Olswang
Melanie Shefford, Olswang

T&Cs form part of a business’ contract with its customer. A lawyer needs to understand how their client’s business works in practice before starting to draft T&Cs. Lawyers often use a template set of T&Cs as a base. Sometimes it’s also useful to look at similar businesses’ T&Cs to see what sorts of things they cover. The final version of the T&Cs might include conditions of sale, website terms of use and privacy issues, depending on what is required.

Written T&Cs can help ensure clarity, avoid misunderstandings and provide information required by law. For example, online businesses must provide specific information about their business, including their full company name. Businesses operating in particular sectors, such as gambling, banking or insurance, may be required to include additional information due to the intricate level of regulation in these sectors. Usually, written T&Cs also include “worst case scenario” provisions. These protect the business if things go wrong and often explain the customer’s rights and remedies (for example, if goods are faulty).

So there is often a business and even a legal justification for the length of T&Cs (even though we manage to buy things in shops without signing up to pages and pages of legalese!). But does the law protect consumers against incomprehensible T&Cs?

Actually, the law requires that consumer T&Cs use everyday language which can be understood by the target customers of the business. Many of the “legal” provisions which are included in business contracts should arguably therefore be left out of consumer T&Cs, because they do not mean anything to ordinary people.

Unfortunately, many businesses fall down on these legal requirements when regulators and consumer bodies examine their T&Cs or investigate consumer complaints. This position is unlikely to change any time soon. Sometimes the consequences for not complying with these consumer laws are serious, but in many cases the business is simply obliged to amend its T&Cs.

In the meantime, some businesses are making an effort to make their T&Cs consumer friendly. As well as a legal compliance benefit, this can be good for business. After all, you are more likely to buy insurance if you can easily understand what cover it provides. Some documents even include a Crystal Mark, meaning that an organisation called the Plain English Campaign has approved them for clarity. Businesses can also make their T&Cs consumer friendly by including summaries and supplementing T&Cs with FAQs.

Melanie Shefford is an associate at Olswang

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