Tesco.net: alleged unfair contract terms

25 February 2005

Complainant: A member of the public
Complaint against: Tesco.net
Case opened: 18 December 2003
Case closed: 16 April 2004
Issue: Alleged unfair contract terms
Relevant instrument : Unfair Terms in Consumer Contract Regulations 1999 ("the Regulations")

Ofcom received a complaint in relation to a term in paragraph 13 of Tesco.net's terms and conditions which states that a customer can cancel an agreement at any time by writing to Tesco.net. Ofcom does not consider that this term is potentially unfair.

Paragraph 13 of Tesco.net's terms and conditions also stated that Tesco "may suspend or cancel the Service … immediately at our reasonable discretion …" Ofcom considers that this term is potentially unfair under paragraph 1(g) of Schedule 2 of the Regulations since it allows the supplier to terminate a contract of indeterminate duration without reasonable notice, except where there are serious grounds for doing so. Tesco.net has agreed to delete the word "immediately" from this term.

Paragraph 14 of Tesco.net's terms and conditions is a disclaimer. It stated that Tesco.net disclaims all liabilities in connection with the following:

  • technical problems including errors or interruptions of the Service
  • unsuitability, unreliability or inaccuracy of the Service
  • inadequacy of the Service to meet your requirements

The clause also states that:

"To the full extent allowed by applicable law, you agree that we will not be liable to you or any third party for any consequential or incidental damages (including but not limited to loss of revenue, loss of profits, loss of anticipated savings, wasted expenditure, loss of privacy and loss of data) or any other direct, indirect, special or punitive damages whatsoever that arise out of or are related to the Tesco.net website."

Ofcom considers that this term is potentially unfair under paragraph 1(b) of Schedule 2 of the Regulations since it excludes or restricts the rights of the consumer vis-á-vis Tesco in the event of total or partial non-performance or inadequate performance by Tesco of any of the contractual obligations. Tesco.net has agreed to revise the whole of paragraph 14 to:

Our Responsibilities to you

14.1 We do not in any way exclude or limit: (i) our liability for death or personal injury caused by our negligence or that of our agents; (ii) any liability under Part 1 of the Consumer Protection Act 1987; or (iii) any liability that cannot by law be excluded or limited.

14.2 We will not in any event be responsible or liable for: (i) any faults, damage or maintenance to your telephone line; (ii) any loss of profit, revenue, business, contract, anticipated savings, goodwill or data or any similar financial loss; or (iii) any indirect or consequential loss or damage.

14.3 Subject to clause 14.1 above, we: (i) make no warranties, conditions, guarantees or representations as to quality or fitness for a particular purpose of the Tesco.net service or other warranties, conditions, guarantees or representations whether express or implied, oral or in writing, except as expressly stated in this Contract; and (ii) exclude all liability for:

  1. the accuracy (or inaccuracy) of any material or other information provided or made available by any third party in relation to the Tesco.net Service;
  2. any third party goods or services purchased or obtained by you or any transactions entered into by you using the Tesco.net Service; and
  3. the transmission or reception of, or any failure to transfer or receive, any information or software.

14.4 Each provision of this clause 14 operates separately. If any provision is disallowed or found to be ineffective by any Court or other regulatory body the other provisions will continue to apply.

14.5 Events Beyond our Control
We shall not be responsible for any delay or failure to carry out our responsibilities under this Contract for reasons beyond our reasonable control, including for example acts of God, exceptionally severe weather, industrial disputes, failure or shortage of power supplies, act of terrorism or riot, war, default or failure of a third party (including any network operator or service provider) or their telecommunications systems or government actions.

On the basis of the above, Ofcom has decided to close the investigation.

It should be noted that Ofcom does not have the power to "clear" terms under the Regulations. Only a court has the power to determine whether a term is unfair under the Regulations. Ofcom is therefore able to consider any further complaints regarding these Terms and Conditions in the light of the evidence presented to him.

Case leader: Andrew Walker (email: Andrew.Walker@ofcom.org.uk)
Case reference: CW/00716/11/03

Text published whent he case was opened

Tesco.net: alleged unfair contract terms

Complainant: A member of the public
Complaint against: Tesco.net
Case opened: 18 December 2003
Issue: Alleged unfair contract terms
Relevant instrument: Unfair Terms in Consumer Contracts Regulations 1999

Oftel has received a complaint about a term in Tesco.net's Terms and Conditions for its Internet services regarding the mechanism for a customer to terminate a contract. Oftel is investigating the complaint.

Case Leader: Andrew Walker (e-mail: Andrew.Walker@ofcom.org.uk)
Case Reference: CW/00716/11/03