Contracts: Reading Between the Lines

September 14, 2020

Contracts have become an important part of conducting business and is instrumental in demarcating the responsibilities of the parties involved as well as to resolve any issues which arises. On various occasions, the terms and conditions in a contract have been used to provide redress to consumers. Hence, contracts can play a vital role in protecting consumers as well as other parties involved alike. However, consumers should read and understand the terms and conditions of a contract before entering a contract as consumers can end up losing their hard-earned money if the terms and conditions only favors the traders involved.  

 Case Study

A consumer sought the services of a wedding planning company earlier this year for his wedding. The Consumer went into a service contract with the company and made an initial deposit of $450. However, due to the COVID 19 pandemic outbreak and the uncertainty involved, he decided to cancel the wedding. As he no longer required the services of the company, the consumer requested for refund. However, the terms and conditions of the contract stated that in case of cancellations, the deposit is not refundable. The consumer neglected to read the terms and conditions of the contract and as a result was denied refund. The Council was able to intervene and get 100% refund for the consumer.

 The Council has received several similar cases therefore, urges consumers to understand the paradigms of a contract. 

 What is a contract?

A contract is a legally enforceable agreement made between two or more people. It can be verbal or written, but it’s a good idea to have a written contract so that everyone is clear about the terms. When a contract is verbal it can be difficult to prove what was agreed to or even that a contract existed. A contract exists when one party makes an offer and the other party accepts it and acts upon it.  

Contracts can be entered into in lots of different ways, such as:

  • you sign a document that clearly describes itself as an agreement or a contract
  • you agree to something over the phone
  • you click on an “I Agree” button on a website.

What to look for in a contract? 

Contracts have terms and conditions which set out the rights and responsibilities of each party.

  • Take time to read the contract – ask if you can take it and read it thoroughly. Do not rush into a contract.
  • Make sure you read through the contract and understand everything, especially the fine print.
  • If you don’t understand something, ask!
  • If you still don’t understand something, or if you are unsure about anything, seek legal advice.
  • Don’t sign a contract because you feel pressured into it.
  • Make sure there aren’t any blank spaces in the contract – these might be filled in later and you won’t know what has been added.
  • All the pages in a contract should be initialed.
  • If any changes are made to the contract these should be signed or initialed so it is clear that all parties have agreed.
  • Make sure you get a copy of the contract.

When is a contract term unfair?

A term of a contract will be unfair if:

  • it causes a significant imbalance in the parties’ rights; and
  • it is detrimental (financial or otherwise) to the consumer.

Examples of unfair terms

 A term that allows one party to get out of its obligations

  • A term that allows a business to wiggle out of its obligations under a contract whenever it likes and without any penalty will potentially cause a great imbalance between the parties. 

A term that allows one party to cancel the contract

  • restricts a consumer’s right to cancel a contract may be unfair, for example, a term which locks a consumer into a contract no matter how inferior the product quality is.

A term that allows one party to change the terms of the contract

  • A term that allows a business to change the terms without the consumer’s consent is likely to be unfair. For example, a term that makes the consumer pay more or get less than originally agreed will probably be unfair.

A term that allows one party to renew or not renew the contract

  • A consumer may be put in a difficult position if a business is allowed to renew or not renew a contract without the consumer’s consent. For example, if a contract is a continuing contract (like phone or internet access) and the business decides not to renew the contract without telling the consumer, the consumer will probably suffer inconvenience and cost as a result of the surprise loss of the service.

What can consumers do?

If you think that a contract term is unfair, the first thing to do is to raise it with the business itself.

  • If you feel that a contract term is unfair, consumers should negotiate for a different term with the business.
  • If you feel like you had no choice but to enter into the agreement, and you are then in a situation where you have to comply with an unfair term, tell the business that you think it’s unfair and why.
  • Send an email or letter so that your complaint is in writing. If you can’t get anywhere with the business, seek legal opinion as well.

As a last resort, consumers also have the option to file for legal proceedings as well.

Consumers who think they have been subject to unfair contract terms or wish to seek advice or clarifications can contact the Council on toll free helpline 155 or lodge a complaint using the Consumer Council of Fiji Mobile App. Alternatively, consumer can email