Unfair Contract Terms

The clauses most often challenged in consumer contracts are consistent.

Blanket exclusions of liability, particularly for goods that do not arrive, do not work, or cause harm.

No refund under any circumstances policies, which conflict with statutory consumer rights.

Terms allowing the supplier to change the price, the service or the terms unilaterally without notice or a right to exit.

Automatic renewal with no reminder and a difficult cancellation process.

Disproportionate charges on cancellation or late payment.

Terms requiring disputes to be resolved in a forum that is impractical for the consumer.

And terms buried in documents the consumer never saw, incorporated by a reference nobody follows.

For a business, the practical exercise is to read its own consumer terms and ask, clause by clause, whether it could defend that provision as fair if a regulator asked. Terms that fail that test should be softened, because an unenforceable clause provides no protection and attracts attention.

The 2018 Act was a significant change, consolidating consumer protection and competition regulation and creating a Commission with real powers including investigation, orders and penalties.

The practical exposure for Nigerian businesses is greatest in the sectors where standard terms dominate: e commerce, telecommunications, financial services, transport, and increasingly subscription services.

The most common problem is the all sales are final policy. A Nigerian online seller publishing terms saying no refunds under any circumstances is publishing something that does not defeat statutory consumer rights. Where goods are defective, do not match the description or never arrive, the consumer has rights the policy cannot remove.

The same applies to a shipping policy disclaiming all responsibility once goods leave the premises. The customer's contract is with the seller.

The second area is presentation. Terms have to be available to the consumer before purchase, in language they can understand. Terms produced for the first time in a dispatch email, or buried in a document the customer was never shown, may not form part of the contract at all.

For businesses the practical response is not to abandon protective terms. It is to make them proportionate, to present them clearly before purchase, and to accept the statutory floor rather than drafting around it, because a term that cannot be enforced protects nothing and invites a complaint.

The same clause can be perfectly enforceable in one contract and vulnerable in another.

In a business to business contract, the parties are treated as capable of protecting themselves. Wide exclusions of liability, one sided termination rights and unusual allocations of risk are generally enforceable where they were agreed, and a business that signed a supplier's standard terms is largely held to them.

In a consumer contract, the imbalance is recognised. The consumer had no realistic opportunity to negotiate, and consumer protection legislation qualifies freedom of contract by making unfair terms challengeable and by giving statutory rights that terms cannot remove.

The practical consequence for a business selling to both is that one set of terms may not serve both audiences. Terms drafted for corporate clients, applied to retail customers, are the ones most likely to contain provisions that will not survive scrutiny.

Enforcement depends on complaints and on regulatory capacity, and most unfair terms are never challenged.

The assessment of fairness is also contextual, so businesses lack a precise line and reasonable drafters can disagree.

Consumers rarely litigate over modest sums, which is why the regulatory route matters more than private claims.

And the protections apply to consumers. A small business buying from a larger one is generally treated as a business, however unequal the bargaining power actually was.