TT Talk - Personal Effects Shipments - beware Consumer Protection Legislation!

In our last edition, we published some advice that Harry Lee from the TT Club office in Hong Kong had recently given to a Club Member there on the risks involved in handling consignments of personal effects. That has prompted Mike Foster, of TTMS(UK) to comment that, in the UK at least, bills of lading for shipments of personal effects will be subject to the Unfair Terms in Consumer Contracts Regulations of 1999. Mike reminds us that under the Regulations, a contractual term is not binding on a consumer if it is unfair. A term is unfair if:

(a) it has not been individually negotiated (e.g. drafted in advance and the consumer is unable to influence its substance); AND

(b) contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract, to the detriment of the consumer

Schedule 2 of the Regulations gives a non-exhaustive list of examples of terms that may be unfair. These include terms that

(a) inappropriately exclude or limit the legal rights of the consumer in the event of total or partial nonperformance or inadequate performance by the supplier

(b) irrevocably bind the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract

(c) exclude or hinder the consumer's right to take legal action or exercise any other legal remedy, particularly by requiring the consumer to take disputes exclusively to arbitration.

The regulations do not apply to international conventions to which members of the European Union, such as the UK are party. That means that they do not apply to bills of lading to which the Hague-Visby Rules apply. Conversely, they would apply to a contract of carriage, such as a waybill, to which the Rules do not apply. Food for thought!