Consumer complaint against Bulldog Communications about unfair contract terms

18 October 2004

Complainant : A member of the public
Complaint against: Bulldog Communications Ltd
Case opened: 14 October 2004
Case closed: 10 February 2005
Issue: Unfair contract terms
Relevant instrument: Unfair Terms in Consumer Contracts Regulations 1999 ("the Regulations").

Ofcom received a complaint in relation to a number of terms in Bulldog's broadband terms and conditions.

Ofcom has considered Bulldog's General Terms.

Clause 2.6 of Bulldog's terms and conditions stated that a consumer may not revoke an offer by them to enter into a contract except in certain specified circumstances.

Ofcom regarded this clause as potentially unfair under Regulation 5(1) of the Regulations, as it may bind the consumer to terms before acceptance (and thus formation) of the contract.

Clause 2.7 stated that if a consumer cancels an order within five days of prospective activation, the consumer will become liable for certain charges.
Ofcom regarded this clause as potentially unfair under Regulation 5(1) of the Regulations, as it may bind the consumer to terms before acceptance (and thus formation) of the contract.

Clause 4.3 stated that it is technically impracticable for Bulldog to provide a fault-free service that it did not warrant or undertake to do so or to provide a service at all.

Ofcom regarded this clause as potentially unfair under paragraph 1(b) of Schedule 2 to the Regulations as it may inappropriately exclude or limit 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 contractual obligations, in particular by excluding liability for providing a faulty service or no service at all where this is within the control of the supplier.

Clause 4.5 stated that, unless they are expressly set out in clause 4, all other representations, warranties, terms and undertakings, express or implied, statutory or otherwise, in respect of the terms and conditions and each Service Contract are expressly excluded.

Ofcom regarded this clause as potentially unfair under paragraph 1(b) of Schedule 2 to the Regulations as it may exclude liability for Bulldog's breach of "implied" and "statutory" rights of the consumer.

Ofcom also regarded this clause as potentially unfair under paragraph 1(n) of Schedule 2 to the Regulations as it may limit the seller's or supplier's obligation to respect commitments undertaken by his agents.

Clause 4.6 stated that the terms and conditions are the exclusive statement of the agreement between the consumer and Bulldog in relation to the subject matter of the terms and conditions.

Ofcom regarded this clause as potentially unfair under paragraph 1(n) of Schedule 2 to the Regulations as it may exclude Bulldog's responsibility under the contract for any understandings or prior agreements between Bulldog and the consumer.

Clause 5.1 stated that where the customer purchases equipment from Bulldog the customer shall have a right to reject the equipment only as set out in the manufacturer's limited warranty.

Ofcom regarded this clause as potentially unfair under paragraph 1(b) of Schedule 2 to the Regulations as it may limit the consumer's rights to reject the equipment to the rights in the manufacturer's warranty, thus excluding the consumer's statutory rights against Bulldog.

Clauses 5.2.2 and 5.2.4 stated that Bulldog acts as a reseller of equipment and that it makes no, and expressly excludes, representations or warranties as to the quality, fitness for purpose or interoperability of such equipment. Where Bulldog sells equipment it stated that for any malfunction or manufacturer's defects outside the control of Bulldog, the rights or remedies of the consumer are limited to the rights offered by the equipment manufacturer.

Ofcom regarded these clauses as potentially unfair under paragraphs 1(b) and 1(n) of Schedule 2 to the Regulations in that they may limit and exclude the consumer's rights or remedies to those extended by the equipment manufacturer, and exclude warranties or rights against Bulldog, and may also exclude the Bulldog's liability for "representations" made by Bulldog or its agents.

Clause 7.11 stated that all amounts due to Bulldog shall be paid in full, without deduction or withholding except as required by law, and that the consumer shall not be entitled to any right of credit, set-off or counterclaim against any such amount.

Ofcom regarded this clause as potentially unfair under paragraph 1(b) of Schedule 2 to the Regulations as it may inappropriately exclude or limit the legal rights of the consumer, including the option of offsetting a debt owed to Bulldog against any claim which the consumer may have.

Clause 9.2 stated that Bulldog shall not be liable to the consumer for any consequential loss or damages, including any economic loss or loss of anticipated savings.

Ofcom regarded this clause as potentially unfair under paragraph 1(b) of Schedule 2 to the Regulations as it may exclude non-business losses and losses that were foreseeable at the beginning of the contract.

Clause 10.3 stated that Bulldog may assign the contract with the consumer to another supplier upon notice to the customer.

Ofcom regarded this clause as potentially unfair under paragraph 1(p) of Schedule 2 to the Regulations as it may give Bulldog the possibility of transferring its rights and obligations under the contract, where this may serve to reduce the guarantees for the consumer, without the consumer's agreement.

Clauses 14.1.1 and 14.1.2 stated that, where a consumer orders services from a door-to-door salesperson, the salesperson has no authority to change the terms or conditions or to bind Bulldog, and that the consumer may not rely on any assurances, representations or warranties which the salesperson makes to the consumer.

Ofcom regarded these clauses as potentially unfair under paragraphs 1(b) and 1(n) of Schedule 2 to the Regulations as they exclude the consumer's rights against Bulldog by preventing the consumer from relying on assurances, representations or warranties made by Bulldog's agent.

Clause 15.1.4 stated that any telephone numbers allocated to the consumer may be withdrawn or replaced by Bulldog at any time.

Ofcom regarded this clause as potentially unfair under paragraph 1(k) of Schedule 2 to the Regulations as it may give Bulldog the absolute ability to withdraw or replace any number allocated to the consumer.

Clauses 16.1.2 and 16.1.3 stated that if the consumer's telephone service, where it is not provided by Bulldog, is disconnected during the Bulldog service term, or if the consumer moves house, certain additional charges will apply.

Ofcom regarded these clauses as potentially unfair under paragraph 1(e) of Schedule 2 to the Regulations as they may require any consumer who fails to fulfil his obligation to pay an unspecified and disproportionately high sum in compensation.

Clause 17.1.1 stated that Bulldog does not warrant that the consumer will not receive or be affected by viruses, spam or other illegal material whether from the Internet or otherwise through its network, and that this applies even though Bulldog may run identifying, protective or filtering devices or software as part of the service.

Ofcom regarded this clause as potentially unfair under paragraph 1(b) of Schedule 2 to the Regulations insofar as it could exclude Bulldog's liability to the consumer for viruses where loss may result due to Bulldog's fault.

Clause 19.1.3 stated that, for special managed installation products, Bulldog does not accept liability for any router faults which develop after the service is activated.

Ofcom regarded this clause as potentially unfair under paragraph 1(b) of Schedule 2 to the Regulations as it excludes Bulldog's liability for router faults where Bulldog may have taken responsibility for those faults.

Clause 21.1 stated that the consumer shall be responsible for configuring the firewall, and that while Bulldog agrees to configure the firewall it does not accept liability for loss or damage once it is configured.

Ofcom regarded this clause as potentially unfair under paragraph 1(b) of Schedule 2 to the Regulations as it excludes Bulldog's liability to the consumer for loss or damage resulting from the configuration of the firewall where loss may result due to the fault of the supplier.

Bulldog has revised its contract in line with Ofcom's concerns. In doing so, it has substantially altered the format of the contract and the numbering of the clauses. While Ofcom, in its Competition Bulletin, would normally describe the changes to the individual clauses, it would in this case not be helpful to do so. Instead, Ofcom refers any person interested in seeing the amendments to Bulldog's terms and conditions, which are available on its website at www.bulldogbroadband.com.

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 it.

Case leader : Andrew Walker (email: Andrew.Walker@ofcom.org.uk)
Case reference: CW/00793/10/04

Text published when the case was opened

Complainant: A member of the public
Complaint against: Bulldog Communications
Case opened: 14 October 2004
Issue: Unfair contract terms
Relevant instrument: Unfair Terms in Consumer Contracts Regulations 1999

Ofcom has received a complaint about terms in Bulldog Communications' contract "Bulldog Broadband Alltime Terms and Conditions", and is investigating whether any terms may be unfair.

Case Leader: Andrew Walker (e-mail: Andrew.Walker@ofcom.org.uk)
Case Reference: CW/00793/10/04