Fair Trade Degree Essay Example | Topics and Well Written Essays - 1000 words

Fair Trade Degree - Essay Example While the banks do not accept that the unfairness rules of the Unfair Terms in Consumer Contract Regulations apply, the OFT argue that such rules apply. A swift determination of this issue will assist expeditiously resolve the fairness issue of these charges.2 The 1999 Regulations, implementing the Directive, revoked and replaced the Unfair Terms in Consumer Contract Regulations 1994. The 1999 Regulations apply in relation to terms in contracts concluded between a seller or a supplier and a consumer (Regulation 4(1)). Regulation 5(1) provides: "A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer." Regulation 5(5) provides that Schedule 2 to the 1999 Regulations contains an indicative and non-exhaustive list of the terms which may be regarded as unfair. Regulation 8(1) provides that an unfair term in a contract concluded with a consumer by a seller or supplier shall not be binding on the consumer. Regulation 8(2) provides that the contract shall continue to bind the parties if it is capable of continuing in existence without the unfair term. The only material exception to the applicability of the test of fairness set out in 1999 Regulations is contained in Regulation 6(2) relating to what are called, for short, "core terms": "In so far as it is in plain intelligible language, the assessment of fairness of a term shall not relate- (a) to the definition of the main subject matter of the contract, or (b) to the adequacy of the price or remuneration, as against the goods or services supplied in exchange". Banks enter into personal current account agreements with their customers who are consumers, containing the terms and conditions relating to the operation of those current accounts by such customers. In so far as any of these terms and charges are contained in documents which are described as notices to, guides to, or communications with, customers, they are nevertheless to be considered as terms of a contract between the Bank and its customers for the purposes of the 1999 Regulations, whether or not they are described as terms or as "policies of the bank" or as anything else. The Banks' current account agreements typically provide or provided for three types of payments to be demanded from customers in connection with unauthorised overdrafts: A fee charged by Banks: (a) when a customer seeks to operate his current account in a way that will result in the account being debited despite there being insufficient available funds to support the debit but the Bank nevertheless agrees to ef fect payment, causing the account to go into overdraft or further overdraft, or to exceed, or further exceed, an already agreed overdraft limit; when a customer moves into or is in an unauthorised overdrawn position within a specified period. A returned item fee, e.g. as in the previous case, a cheque is presented but in this case the Bank declines to authorise payment because there are insufficient funds, and the cheque has to be returned to the payee marked "R/D" or "RDPR" or "Effects uncleared". An increased rate of interest charged on unauthorised overdrafts granted in the circumstances set out above. The provisions in the