Barratt Homes
- Investigation:
- Barratt Homes
- Contract identifier:
- UTCCRContract-1
- Country of complaint:
- United Kingdom
- Country of origin:
- United Kingdom
- Trading sector group:
- Newcastle Upon Tyne
- Trading Sector:
- House Fittings and Appliances//House Construction
- Action taken by:
- OFT
- Local Authority:
- Newcastle Upon Tyne
- Legislation used:
- Community Infringements Specified UK Laws//Unfair Contract Terms 1999
- Regulation breached:
- Unfair Contract Term
- Notes:
Notes
| Original term | Application of regulations/Enforcer view | How changed | New term |
|---|---|---|---|
| Term 3.2 | 1(k) Right to change what is supplied : 1(k) gave the supplier a wide discretion to change what was being supplied to the consumer, for such widely defined reasons as 'as may be expedient or necessary and as the Company in its discretion thinks fit.' |
Amended so that the term explains and limits the circumstances in which substitute materials are likely to be required and further so that such replacement materials would be of similar appearance and equal or better specification and quality as shall readily be obtainable. Also amended so that the right to vary would not significantly affect the market value of the property. | Term 3.2 |
| Term 3.3 | 1(b)2f Exclusion/restriction of liability for delay : 1(b) 2(f) sought to exclude the supplier's liability for delay for some matters which OFT considered within its control. |
Revised so that the consumer is protected by an assurance from the supplier that it will constantly use its reasonable endeavours to prevent delay and will do all that may be reasonably required to proceed with construction. | Term 3.3 |
| Term 13 | 1(q) Restricting the consumer's remedies : 1(q) unfair compulsory arbitration clause that required all disputes to go first to arbitration if one party requested a dispute be resolved in this way. |
Revised so that the consumer and supplier are expected to use all reasonable endeavours to resolve disputes through arbitration. | Term 13 |
| Term 14.2 | 1(b)2c Restrictions on liability (as to type, amount etc) : 1(b) and 1(n) 14(a): unfairly allowed the supplier to exclude liability for statements or representations made in the securing of the contract. |
Revised to reflect the position at law (ie that contracts for land should be in writing) whilst allowing for variations to be made in writing. In addition, a clear warning to this effect has been placed in an advisory document. | Term 14.2 and 'Fourth Schedule...Representations and warranties...' |
| Term 14.3 | 1(b)2c Restrictions on liability (as to type, amount etc) : 1(b) and 1(n) 14(a): required the consumer to confirm that no oral representations had been made to them which had influenced induced or persuaded them to enter the contract, thus unfairly allowing the supplier to exclude liability for statements or representations made in the securing of the contract. |
Deleted | |
| Term 14.4 | 1(n)14a Clauses disclaiming liability for employees statemen : 1(n) 14(a) and 1(b): unfairly allowed the supplier to exclude liability for statements or representations made in the securing of the contract. |
Revised so that the supplier accepts liability for the statements or representations it makes where the consumer advises of their intention to rely on them, except where the supplier has explicitly rejected them. | Term 14.3 |
| 'Important Notice: Representations and Warranties' | 1(n)14a Clauses disclaiming liability for employees statemen : 1(n) 14(a) unfairly sought to exclude the supplier's liability for representations and warranties made in the securing of the contract. |
Revised to clarify that this notice is for guidance purposes only and is not intended to be relied on as a term of the contract. | 'The Fourth Schedule: Before you sign This notice does not form part of the agreement ' |
| Reservation Form:'I/We request you to reserve for me/us the above mentioned property...terms and conditions in your standard form of contract.' | 1(i) Binding consumers to hidden terms : 1(i): referred the consumer to the terms of their standard form contract without making provision for the consumer to have a reasonable opportunity of becoming acquainted with them. |
Revised so that the terms of the standard form contract are no longer referred to. | 'I/We request you to reserve for me/us the above mentioned property at the price specified above until ' |
| Customer Acceptance Certificate: 'I/we confirm that unless noted to the contrary, I/we accept the above items [where applicable] as satisfactory.' 'This does not affect your statutory rights' | Reg 5 18(e) Consumer declarations about contractual circumst : Regulation 5: unfair consumer declaration that required the consumer to confirm that the property was satisfactory unless they notified the supplier to the contrary, without explaining how they should do so Regulation 7: unexplained statutory rights reference |
Revised so that consumers are clearly informed as to how to register concerns with any unsatisfactory items in the property. Amended to clarify the rights referred to, and further to explain that the declaration does not apply to items that the consumer could not have reasonably have been expected to note at or before taking possession. | 'Note to Customer 1) Any items requiring attention should be noted separately ' 2) This Certificate does not affect your rights under the NHBC ' |
- Outcome reached:
- Informal Undertaking Obtained
- Date effective:
- 17 March 2005
- Received from:
- Outcome text:
Other Information
Term 5.2 The OFT initially considered the scope of this term which prevented the consumer from delaying completion if minor works were outstanding to be too wide and therefore weighted in favour of the supplier. However, the supplier provided examples of what is likely to constitute a minor work and on this basis we withdrew our challenge.
Specific Reservations
Third Schedule, Term 5. The OFT were of the view that this term placed an unreasonable obligation on the consumer, by requiring them to accept a mortgage offer within three working days. However we have reserved the OFT's position on the term. Should we receive evidence that this term is being used to the detriment of consumers, we will of course reconsider our position.
Specific Reservations
Reservation Form: 'It is agreed that the reservation of the said Property shall lapse on if I/we shall have failed by that date to sign and exchange Contracts deposit thereby required. In that case you shall be entitled to retain the sum of £ from the Reservation Deposit for administration costs.' Although the supplier did take steps to make the term clearer by removing legal jargon, the OFT remained concerned that as worded the term could allow the supplier to retain such an amount where it was at fault for the failure to exchange on time. However, in view of the supplier's representations that confirmed the term is intended to operate only where the consumer is at fault, the OFT reserved its position.
Other Information
The supplier confirmed that revised agreements would be used by all its solicitors.
Specific Reservations
Term 1.1.5 The OFT raised concerns with the provision that only 10 working days notice would be given before completion was due to be finalised. But in light of the supplier's explanation that this time period represents the norm in domestic conveyancing, we reserved our position on this issue pending evidence that this term is working to the detriment of consumers.
Specific Reservations
Term 3.4 The OFT objected to this term's requirement that consumers should notify the supplier of any problems with the property before they take possession of it. The supplier has amended this term so that the requirement to notify applies before 'or at' the time of possession, and further has clarified that the requirement to notify does not apply to problems that could not reasonably have been expected to have been noted at or before taking possession but which were present at the time (clarifying will be remedied as soon as possible after notification). However, the OFT were of the view that the revised wording could imply that the supplier would not be liable for any damage caused subsequent to the consumer's visit and before taking possession, and has therefore reserved position it pending evidence demonstrating this is detrimentally affecting consumers who sign up to these terms.
Specific Reservations
Term 3.5 This term prevents consumers from retaining an amount of the purchase price in the event that roads and sewers relating to the property are incomplete. The OFT reserved position on this term pending future complaints or other evidence that suggests it is operating to the detriment of consumers.
Specific Reservations
Term 4.3 This term entitles the supplier to retain 10% deposit of the contract price in the event that the agreement does not go ahead or if completion does not happen because of the consumer's fault. The OFT is concerned that this may allow the supplier to retain more than a reasonable pre-estimate of its loss in certain circumstances, and has therefore reserved its position on the term, pending receipt of complaints or future evidence that realise its concerns.
Specific Reservations
Term 9.1 In the OFT's view the wide unlimited right the supplier enjoys under this term to change the layout of the estate has the potential for unfairness. However, in light of representations made by the supplier, the OFT has reserved position pending further evidence or complaints.
Specific Reservations
Term 9.2 This term was amended so that the right to vary the boundaries of the property has been limited to such changes that would not 'significantly' rather than 'substantially' affect the area or the consumer's use and/or enjoyment of it. However, the OFT remained concerned with the term's wide ranging and apparently unlimited discretion to vary the boundary for any reason and as a result has reserved its position on the term.
Specific Reservations
Term 14.6 During the enforcement process the supplier introduced this new term which OFT considered potentially unfair because it excluded the supplier's liability to consumers for compensation due as a result of defects with the property. Although the term provided for the supplier to repair defects it excluded any other compensation the consumer may be entitled to. The OFT has reserved its position on this term pending evidence of consumer complaints.
- OFT telephone enquiries:08457 22 44 99
- Consumer Direct telephone enquiries:08454 04 05 06