The contract required customers to confirm that they had read and understood the terms of the contract, which they may not have any real awareness of.

Firms should draft contracts in plain and intelligible language and must also give customers a proper opportunity to read all the terms of the contract.

Customers should check the details of the contracts they enter into. But a contract term is likely to be unfair if it requires them to declare that they have read and understood the terms of the contract. This is because it binds customers to terms which, in practice, they may not have any real awareness of.

The firm has changed the contract term. The new term gives a clear warning in bold text that customers should read and understand the terms before signing them and, importantly, should ask questions if they do not understand them.

The firm has agreed to change the term in new contracts with customers from 1 December 2008 and to not include the same term or a similar term with the same effect in future contracts. The firm has also agreed to not rely on this potentially unfair term in contracts with existing customers. In addition, the firm has taken action to ensure their appointed representatives comply with this undertaking.

‘I confirm that I have received, read and understood this agreement and agree to the terms set out within.’

‘This is our standard client agreement upon which we intend to rely. For your own benefit and protection you should read these terms carefully before signing them. If you do not understand any point please ask for further information.’

Read more agreements from firms – see Unfair contracts.

Read more about Getting financial advice.

Read more about our work on Unfair contract terms.