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Bahamas Numbered Acts |
No. 1 of 2006 |
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AN ACT FOR THE REGULATION OF UNFAIR TERMS |
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IN CONSUMER CONTRACTS AND RELATED MATTERS |
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[Date of Assent : - 6th February, 2006] |
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Enacted by the Parliament of The Bahamas. |
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1.(1)
This Act may be cited as the
Unfair Terms in Consumer Contracts Act, 2006.
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Short title and commencement. |
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(2)
This Act shall come operation
on such day as the Minister may, by notice published in the
Gazette, appoint.
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2.(1)
In this Act -
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Interpretation. |
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"business" includes a trade or profession and the activities of any government department or local or public authority; |
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"consumer" means a natural person who, in making a contract to which this Act applies, is acting for purposes which are outside his business; |
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"court" means the Supreme Court; |
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"Minister" means the Minister responsible for Consumer Protection; |
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"seller" means a person who sells goods and who, in making a contract to which this Act applies, is acting for purposes relating to his business; |
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"supplier" means a person who supplies goods or services and who, in making a contract to which this Act applies, is acting for purposes relating to his business. |
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3.(1)
Subject to the provisions of
the First Schedule, this Act applies to any term in a contract
concluded between a seller or supplier
and a consumer where such
term has not been individually negotiated.
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Terms to which this Act applies. First Schedule. |
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(2)
In so far as it is in plain,
intelligible language, no assessment shall be made of the fairness
of any term which -
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(a)
defines the main subject matter
of the contract, or
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(b)
concerns the adequacy of the
price or remuneration, as against the goods or services sold or
supplied.
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(3)
For the purposes of this Act,
a term shall always be regarded as not having been individually
negotiated where it has been drafted
in advance and the consumer
has not been able to influence the substance of the term.
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(4)
Notwithstanding that a
specific term or certain aspects of it in a contract has been
individually negotiated, this Act shall apply
to the rest of a
contract if an overall assessment of the contract indicates that it
is a pre-formulated standard contract.
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(5)
It shall be for any seller or
supplier who claims that a term was individually negotiated to show
that it was so negotiated.
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4.(1)
In this Act, subject to
subsections (2) and (3), "unfair term" means any term which
contrary to the requirement of good faith causes
a significant
imbalance in the parties' rights and obligations under the contract
to the detriment of the consumer.
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Unfair terms. |
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(2)
An assessment of the unfair
nature of a term shall be made taking into account the nature of
the goods or services for which the contract
was concluded and
referring, as at the time of the conclusion of the contract, to all
circumstances attending the conclusion of the
contract and to all
the other terms of the contract or of another contract on which it
is dependent.
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(3)
In determining whether a term
satisfies the requirement of good faith, regard shall be had in
particular to the matters specified
in the Second Schedule.
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Second Schedule. |
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(4)
The Third Schedule contains an
indicative and non-exhaustive list of the terms which may be
regarded as unfair.
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Third Schedule. |
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5.(1)
An unfair term in a contract
concluded with a consumer by a seller or supplier shall not be
binding on the consumer.
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Consequence of inclusion of unfair terms in contracts. |
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(2)
The contract shall continue to
bind the parties if it is capable of continuing in existence
without the unfair term.
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6.
A seller or supplier shall
ensure that any written term of a contract is expressed in plain,
intelligible language, and if there is
doubt about the meaning of a
written term, the interpretation most favourable to the consumer
shall prevail.
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Construction of written contracts |
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7.(1)
The Minister may consider any
complaint made to him that any contract term drawn up for general
use is unfair, unless the complaint
appears to the Minister to be
frivolous or vexatious.
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Prevention of continued use of unfair terms. |
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(2)
If having considered a
complaint about any contract term pursuant to paragraph (1) the
Minister considers that the contract term is
unfair he may, if he
considers it appropriate to do so, refer the matter to the
Attorney-General to bring proceedings for an injunction
(in which
proceedings the Attorney-General may also apply for an
interlocutory injunction) against any person appearing to him to
be
using or recommending use of such a term in contracts concluded
with consumers.
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(3)
The Minister may, if he
considers it appropriate to do so, have regard to any undertakings
given to him by or on behalf of any person
as to the continued use
of such a term in contracts concluded with consumers.
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(4)
The Minister shall give
reasons for his decision to apply or not to apply, as the case may
be, for an injunction in relation to any
complaint which this Act
require him to consider.
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(5)
The court may, on an
application by the Attorney-General grant an injunction on such
terms as it thinks fit.
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(6)
An injunction may relate not
only to use of a particular contract term drawn up for general use
but to any similar term, or a term
having like effect, used or
recommended for use by any party to the proceedings.
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(7)
The Minister may arrange for
the dissemination in such form and manner as he considers
appropriate of such information and advice
concerning the operation
of this Act as may appear to him to be expedient to give to the
public and to all persons likely to be affected
by this Act.
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8.
This Act shall apply to
contracts entered into before, on or after this Act comes into
operation.
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Application. |
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FIRST SCHEDULE |
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Contracts and Particular Terms Excluded |
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from the Scope of this Act |
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This Act does not apply to - |
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(a)
any contract relating to
employment;
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(b)
any contract relating to
succession rights;
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(c)
any contract relating to rights
under family law;
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(d)
any contract relating to the
incorporation and organisation of companies or partnerships;
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(e)
any term incorporated in order to
comply with or which reflects -
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(i)
statutory or regulatory
provisions of The Bahamas; or
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(ii)
the provisions or principles of
international conventions to which The Bahamas is party.
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SECOND SCHEDULE |
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Assessment of Good Faith |
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In making an assessment of good faith, regard shall be had in particular to - |
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(a)
the strength of the bargaining
positions of the parties;
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(b)
whether the consumer had an
inducement to agree to the term;
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(c)
whether the goods or services
were sold or supplied to the special order of the consumer;
and
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(d)
the extent to which the seller or
supplier has dealt fairly and equitably with the consumer.
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THIRD SCHEDULE |
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Indicative and Illustrative List of Terms |
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which may be Regarded as Unfair |
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1.
Terms which have the object or
effect of -
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(a)
excluding or limiting the legal
liability of a seller or supplier in the event of the death of a
consumer or personal injury to the
latter resulting from an act or
omission of that seller or supplier;
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(b)
inappropriately excluding or
limiting the legal rights of the consumer vis-à-vis the
seller or supplier or another party in
the event of total or
partial non-performance or inadequate performance by the seller or
supplier of any of the contractual obligations,
including the
option of offsetting a debt owed to the seller or supplier against
any claim which the consumer may have against him;
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(c)
making an agreement binding on
the consumer whereas provision of services by the seller or
supplier is subject to a condition whose
realisation depends on his
own will alone;
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(d)
permitting the seller or supplier
to retain sums paid by the consumer where the latter decides not to
conclude or perform the contract,
without providing for the
consumer to receive compensation of an equivalent amount from the
seller or supplier where the latter is
the party cancelling the
contract;
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(e)
requiring any consumer who fails
to fulfil his obligation to pay a disproportionately high sum in
compensation;
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(f)
authorising the seller or
supplier to dissolve the contract on a discretionary basis where
the same facility is not granted to the
consumer, or permitting the
seller or supplier to retain the sums paid for services not yet
supplied by him where it is the seller
or supplier himself who
dissolves the contract;
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(g)
enabling the seller or supplier
to terminate a contract of indeterminate duration without
reasonable notice except where there are
serious grounds for doing
so;
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(h)
automatically extending a
contract of fixed duration where the consumer does not indicate
otherwise, when the deadline fixed for the
consumer to express this
desire not to extend the contract is unreasonably early;
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(i)
irrevocably binding the consumer
to terms with which he had no real opportunity of becoming
acquainted before the conclusion of the
contract;
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(j)
enabling the seller or supplier
to alter the terms of the contract unilaterally without a valid
reason which is specified in the contract;
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(k)
enabling the seller or supplier
to alter unilaterally without a valid reason any characteristics of
the product or service to be provided;
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(l)
providing for the price of goods
to be determined at the time of delivery or allowing a seller of
goods or supplier of services to
increase their price without in
both cases giving the consumer the corresponding right to cancel
the contract if the final price
is too high in relation to the
price agreed when the contract was concluded;
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(m)
giving the seller or supplier the
right to determine whether the goods or services supplied are in
conformity with the contract, or
giving him the exclusive right to
interpret any term of the contract;
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(n)
limiting the seller's or
supplier's obligation to respect commitments undertaken by his
agents or making his commitments subject to
compliance with a
particular formality;
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(o)
obliging the consumer to fulfil
all his obligations where the seller or supplier does not perform
his;
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(p)
giving the seller or supplier the
possibility of transferring his rights and obligations under the
contract, where this may serve
to reduce the guarantees for the
consumer, without the latter's agreement;
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(q)
excluding or hindering 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 not covered by legal provisions, unduly
restricting the evidence available to
him or imposing on him a
burden of proof which, according to the applicable law, should lie
with another party to the contract.
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2.
Scope of sub-paragraphs (g),
(j) and (1) of paragraph 1.
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(a)
Sub-paragraph (g) is without
hindrance to terms by which a supplier of financial services
reserves the right to terminate unilaterally
a contract of
indeterminate duration without notice where there is a valid
reason, provided that the supplier is required to inform
the other
contracting party or parties thereof immediately.
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(b)
Sub-paragraph (j) is without
hindrance to terms under which a supplier of financial services
reserves the right to alter the rate
of interest payable by the
consumer or due to the latter, or the amount of other charges for
financial services without notice where
there is a valid reason,
provided that the supplier is required to inform the other
contracting party or parties thereof at the earliest
opportunity
and that the latter are free to dissolve the contract
immediately.
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Sub-paragraph (j) is also without hindrance to terms under which a seller or supplier reserves the right to alter unilaterally the conditions of a contract of indeterminate duration, provided that he is required to inform the consumer with reasonable notice and that the consumer is free to dissolve the contract. |
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(c)
Sub-paragraphs (g), (j) and (1)
do not apply to -
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(i)
transactions in transferable
securities, financial instruments and other products or services
where the price is linked to fluctuations
in a stock exchange
quotation or index or a financial market rate that the seller or
supplier does not control; and
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(ii)
contracts for the purchase or
sale of foreign currency, traveller's cheques or international
money orders denominated in foreign currency.
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(d)
Sub-paragraph (1) is without
hindrance to price indexation clauses, where lawful, provided that
the method by which prices vary is
explicitly described.
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