NOTE Nº 0638 · REV B

Unfair Terms in Building Contracts: What Doesn't Bind

Unfair terms in builder contracts under the Consumer Rights Act: the fairness test, the grey list, classic offending clauses and how to challenge them.

By The Renovation Notes Team · 4 min read · Published 29 August 2026 · updated within the last month · Sources checked 30 September 2026

A close-up of a hand highlighting a contract, emphasizing important legal terms.

In short

Consumer contract terms that create significant imbalance against you: sweeping liability exclusions, forfeited deposits, unilateral price rises, punitive cancellation fees, fail the Consumer Rights Act's fairness test and simply don't bind, however clearly you signed. The core price and scope can't be challenged for fairness, but the small print around it can, and courts must consider it even if you don't raise it.

“But you signed it” is not the end of the argument. For consumers, English law reads the small print with a hostile eye: terms that stack the deck unfairly against you can be struck from the contract entirely, and the builder’s own standard terms are exactly where such clauses live. Knowing the doctrine turns fine print from a threat into a negotiation.

The fairness test

Under Part 2 of the Consumer Rights Act 2015, a term in a consumer contract is unfair, and therefore not binding on you, if, contrary to good faith, it causes a significant imbalance in the parties’ rights to your detriment.¹ Two supporting rules sharpen it. Written terms must be transparent, in plain and intelligible language and legible.² Where a term could have different meanings, the meaning most favourable to you prevails.³ The main carve-out: the core bargain, the price itself and the main subject matter, isn’t assessed for “fairness” (the law polices the small print, not whether you struck a good deal), provided it was transparent and prominent.⁴

Courts must consider fairness of their own motion in consumer cases where they have enough legal and factual material to do so, so a judge can disapply a term even if you never thought to argue it.⁵

The grey list, translated to building sites

The Act carries an indicative “grey list” of suspect terms.⁶ The building-trade greatest hits:

Total liability exclusions, “no responsibility for any damage howsoever caused”. A term cannot exclude or restrict liability for death or personal injury caused by negligence; sweeping property-damage exclusions face the fairness test and often fail it.⁷
Deposit forfeiture, “all deposits non-refundable in any circumstances”, regardless of who cancelled or why.⁶ Compare the lawful deposit position.
Punitive cancellation fees, charges bearing no relation to actual loss (and check your statutory cooling-off rights sit above any contract wording).⁶
Unilateral variation, the trader may raise the price or change the spec at will, while you remain bound.⁶ A genuine, transparent cost-escalation mechanism is one thing; “prices subject to change” is another.
Asymmetric remedies, the builder may terminate freely but you face penalties; interest at extortionate rates on late payment by you, silence about late performance by them (compare a fair delay-damages clause, which cuts the other way).⁶
“Sign-off means acceptance of everything”, clauses deeming all work approved on final payment, defeating your defects rights. A term that would exclude the builder’s statutory duty to work with reasonable care and skill does not bind you at all.⁸

Standard-form contracts drafted by neutral bodies, the JCT homeowner forms, are largely free of this genus, which is quietly one of the best reasons to insist on them.

Using the doctrine

Before signing: challenge grey-list terms directly, “this clause wouldn’t survive the CRA fairness test; let’s strike it or use the JCT form”. A builder’s response to that sentence is vetting data all by itself.

In a live dispute: when a builder brandishes a clause, the forfeited deposit, the excluded liability, the £900 “admin fee”, answer on paper: the term creates significant imbalance, you’ll rely on Part 2 CRA, and you’re proceeding on your statutory rights. Then run the normal escalation; these clauses are familiar territory for adjudicators and district judges. The rest of the contract survives (the offending term is severed), so your own rights under it remain intact.⁹

The mirror rule: the Act protects consumers, not traders, so it will not strike out a homeowner’s own terms, but a homeowner-drafted contract stuffed with one-sided penalties still backfires: good builders decline it or price the risk in. The contracts pillar’s checklist is balanced by design, and balanced paper is what actually gets signed.

This guide is general information for homeowners in England and Wales, not legal advice.

References (9)

Figures in this note were checked against the sources below on 30 September 2026. Superscript numbers in the text point to them. Every source the site cites, by topic.

1technicalvery strongThe National Archives (legislation.gov.uk), legislation.RN-8QHXF5Section 62(1) and 62(2) make an unfair term of a consumer contract and an unfair consumer notice not binding on the consumer, while 62(3) still lets the consumer rely on the term if they choose. Section 62(4) sets the test: a term is unfair if, 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. Section 62(5) requires fairness to be judged by the nature of the subject matter and by all the circumstances existing when the term was agreed, together with all the other terms of that contract or any contract it depends on; 62(6) and 62(7) apply the same test to notices. Section 62(8) preserves the separate exclusion-of-liability rules in sections 31, 47, 57 and 65. This is the provision for challenging a non-refundable deposit clause or a one-sided variation clause in a builder's terms.
2technicalvery strongThe National Archives (legislation.gov.uk), guidance.RN-HKXILMSection 68 of the Consumer Rights Act 2015. It requires written consumer contract terms to be transparent, meaning plain, intelligible and legible.
3technicalvery strongThe National Archives (legislation.gov.uk), guidance.RN-VFZILXSection 69 of the Consumer Rights Act 2015. It settles that an ambiguous consumer contract term takes the meaning most favourable to the consumer.
4technicalvery strongThe National Archives (legislation.gov.uk), guidance.RN-VHZKSASection 64 of the Consumer Rights Act 2015. It exempts the main subject matter and the price from the fairness test, but only where those terms are transparent and prominent.
5technicalvery strongThe National Archives (legislation.gov.uk), guidance.RN-DACV3XSection 71 of the Consumer Rights Act 2015. It places a duty on the court to consider fairness itself, provided it has sufficient legal and factual material.
6technicalvery strongThe National Archives (legislation.gov.uk), guidance.RN-U0OGJWSchedule 2 of the Consumer Rights Act 2015, the indicative list of terms that may be regarded as unfair, including deposit retention, disproportionate compensation and unilateral variation.
7technicalvery strongThe National Archives (legislation.gov.uk), guidance.RN-UTN1TYSection 65 of the Consumer Rights Act 2015. It bars a trader from excluding or restricting liability for death or personal injury resulting from negligence.
8technicalvery strongThe National Archives (legislation.gov.uk), legislation.RN-AJNJD0Section 57 is the anti-exclusion clause for service contracts. Subsection (1): a term is not binding on the consumer to the extent it would exclude the trader's liability under section 49 (reasonable care and skill). Subsection (2): the same for section 50 (information given about the trader or service being binding), subject to section 50(2). Subsection (3): a term restricting liability under sections 49 to 52 is not binding if it would stop the consumer recovering the price paid. Subsection (4) extends this to terms that exclude or restrict a right or remedy, make it subject to a restrictive or onerous condition, disadvantage a consumer for pursuing it, or exclude rules of evidence or procedure. Subsection (5) covers preventing a duty arising at all; subsection (6) preserves arbitration agreements; subsection (7) points to Schedule 3 for enforcement.
9technicalvery strongThe National Archives (legislation.gov.uk), guidance.RN-0DFEWUSection 67 of the Consumer Rights Act 2015. It provides that when an unfair term does not bind the consumer, the rest of the contract continues to have effect.

Consumer Rights Act 2015, section 62, The National Archives (legislation.gov.uk), accessed 30 September 2026. legislation.gov.uk
Consumer Rights Act 2015, section 68, The National Archives (legislation.gov.uk), accessed 30 September 2026. legislation.gov.uk
Consumer Rights Act 2015, section 69, The National Archives (legislation.gov.uk), accessed 30 September 2026. legislation.gov.uk
Consumer Rights Act 2015, section 64, The National Archives (legislation.gov.uk), accessed 30 September 2026. legislation.gov.uk
Consumer Rights Act 2015, section 71, The National Archives (legislation.gov.uk), accessed 30 September 2026. legislation.gov.uk
Consumer Rights Act 2015, Schedule 2, The National Archives (legislation.gov.uk), accessed 30 September 2026. legislation.gov.uk
Consumer Rights Act 2015, section 65, The National Archives (legislation.gov.uk), accessed 30 September 2026. legislation.gov.uk
Consumer Rights Act 2015, section 57, The National Archives (legislation.gov.uk), accessed 30 September 2026. legislation.gov.uk
Consumer Rights Act 2015, section 67, The National Archives (legislation.gov.uk), accessed 30 September 2026. legislation.gov.uk