How to review terms and conditions under UK law

Standard terms and conditions are reviewed against two different regimes. Terms used with consumers are tested under the Consumer Rights Act 2015. Terms used with businesses are tested mainly under the Unfair Contract Terms Act 1977 and the common law on incorporation. Many businesses use one set for both, which is where the trouble starts. This checklist covers both and shows how to redline your terms in Word with LexDraft.

Last checked: 17 October 2026. The law changes; check the current position before relying on this page.

First, who is the customer?

A consumer is an individual acting for purposes wholly or mainly outside their trade, business, craft or profession. If you sell to both consumers and businesses, consider separate terms, or at least separate liability and cancellation clauses.

Consumer terms: Consumer Rights Act 2015

• Fairness. A term is unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations to the consumer's detriment (section 62). Unfair terms do not bind the consumer. Schedule 2 lists examples of terms that may be unfair, such as broad rights to vary the price or the service.
• Price and main subject matter. These core terms are exempt from the fairness test only if they are transparent and prominent (section 64).
• Transparency. Written terms must be in plain and intelligible language (section 68). If a term could have different meanings, the meaning most favourable to the consumer prevails (section 69).
• Statutory rights. Terms that exclude or restrict the consumer's statutory rights for goods, digital content and services are not binding (sections 31, 47 and 57), and liability for death or personal injury caused by negligence cannot be excluded (section 65).
• Cancellation. For distance and off-premises contracts, the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 give a 14-day cancellation right in most cases and require pre-contract information. Check the cancellation wording and the model form.
• Unfair commercial practices. Part 4 of the Digital Markets, Competition and Consumers Act 2024 has applied since 6 April 2025. The CMA can now enforce consumer law directly and fine businesses up to 10% of global turnover. Check that headline prices include unavoidable fees.
• Subscriptions. The DMCC Act subscription contracts regime (reminder notices, cooling-off and easy exit) is not yet in force. In August 2026 the government said it will start in January 2027, but the secondary legislation and guidance were still awaited when this page was checked. If your terms cover auto-renewing plans, plan the changes now.

Business terms: UCTA and incorporation

• Reasonableness. Under the Unfair Contract Terms Act 1977, where one party deals on the other's written standard terms of business, exclusions and limits of liability for breach must satisfy the reasonableness test (section 3). Liability for death or personal injury caused by negligence cannot be excluded at all (section 2(1)).
• Sale of goods. The implied term as to title cannot be excluded. The implied terms as to description, quality and fitness can be excluded in business contracts only if reasonable (section 6).
• International supply. Many international supply contracts fall outside the controls in UCTA (section 26). Check where the parties are and where the goods go.
• Incorporation. Terms must be brought to the other party's attention before the contract is made. Particularly onerous or unusual terms need to be fairly brought to their attention (Interfoto v Stiletto [1989]).
• Battle of the forms. If both sides send their own terms, the last set sent before acceptance often wins. Make sure your order process says which terms apply.

Review the terms in Word with LexDraft

1. Open the terms in Word, open LexDraft from the Home tab and set the jurisdiction chip to UK: England & Wales (or UK: Scotland or UK: Northern Ireland if that is the governing law).
2. Run the quick checks. They are rule-based and run without AI, catching undefined or unused defined terms, broken cross-references, numbering gaps and inconsistent capitalisation.
3. Run the review. If the terms are for services, use the Services playbook; for SaaS terms, use the SaaS MSA playbook. Other standard terms, such as terms for the sale of goods, run as a general review, because LexDraft has no dedicated terms and conditions playbook. Findings are graded Critical, High, Medium or Low, and LexDraft flags standard terms that are missing.
4. Accept or reject each proposed redline. Accepted edits land as native Word tracked changes, ready for the other side.
5. Ask the Assistant to explain a clause in plain English or suggest wording for your side. Answers use UK spelling.
6. Look up any case you want to rely on in the Case law tab, then open the judgment on Find Case Law and read it yourself. UK judgments in LexDraft come from The National Archives' Find Case Law service, which only partially represents the activities of the courts and tribunals. Not every judgment or decision is included. Find Case Law does not include judgments from Scottish or Northern Irish courts or tribunals.

LexDraft does not give legal advice and does not summarise judgments. AI output can be wrong, so qualified counsel must check every redline before it goes out.

Common mistakes

• One set of terms for consumers and businesses, with a liability cap that cannot bind consumers.
• A unilateral variation clause with no notice or exit right for consumers.
• Terms hidden behind a link that customers never have to open before ordering.
• Using "Customer", "Buyer" and "you" for the same party. The defined-term check catches this.

This guide is general information, not legal advice. LexDraft does not give legal advice; qualified counsel must review every draft. LexDraft is not affiliated with or endorsed by The National Archives or any court. Spotted something out of date? Email support@lexdraft.ai and we will fix it.