How to identify unfair terms and why you should consult a lawyer

In business, as well as in everyday life, contracts underpin the most important legal relationships. Renting a flat, taking out a subscription, engaging services, purchasing a product, entering into a commercial partnership or using a digital platform all involve accepting contractual terms. The problem arises when the document no longer reflects a genuine balance, but instead shifts excessive risks, hidden costs or disproportionate obligations onto one party.

These provisions are known as unfair terms. They can appear in service agreements, banking contracts, leasing, telecommunications, insurance, tenancies, supply agreements, software licences, investment contracts or in online terms and conditions. Sometimes they are obvious. At other times they are buried in technical language, in annexes, in separate policies or in paragraphs that are hard to follow.

For someone without legal training, spotting them can be difficult. A commercial lawyer's analysis is valuable before signing, but also once a dispute has arisen. At Buju, Stanciu & Associates, our experience in corporate law, litigation and modern fields such as digital technologies and cryptocurrencies allows for an analysis attuned to today's realities.

What are unfair terms?

In dealings between professionals and consumers, the law affords the consumer special protection. Contracts must be clear and unambiguous, and unclear terms are interpreted in the consumer's favour. Unbalanced provisions can also arise in dealings between companies, even though the legal analysis differs. In a B2B commercial contract, what matters is the negotiation, the parties' conduct, good faith, proportionality and the risks assumed.

Importantly, not every disadvantageous term is automatically unfair. A contract may contain firm obligations, penalties or limitations without these being unlawful. The problem arises where the provision is imposed, lacks transparency, is disproportionate or gives one party excessive power over the contract.

Types of unfair terms

1. 01

   Unilateral amendment of the contract

   These allow one party to change the price, the terms, the fees, the services or the contractual conditions without the other party's agreement. For example, a supplier reserves the right to amend its charges at any time, without clear notice or a right to terminate.

2. 02

   Excessive limitation of liability

   Provisions by which one party seeks to exclude its liability almost entirely, even where it fails to perform its obligations. For example, a company states that it is not liable for the client's losses, even though the service depends directly on its own actions.

3. 03

   Disproportionate penalties

   Penalties are normal in many contracts, but they become problematic where they are excessive, applied to one party only, or unrelated to the actual loss. A heavy penalty for a minor delay may be a warning sign. When setting such sanctions, what matters is the correct approach to drafting a penalty clause.

4. 04

   Unbalanced termination rights

   A contract raises questions where it allows only one party to bring the relationship to an end quickly and without cause, while the other party is locked in for the long term or faces substantial termination costs.

5. 05

   Hidden fees or unclear costs

   Some contracts include administration fees, processing charges, additional costs or mandatory services that are only vaguely referred to. If the final price is not clear from the outset, there is both a legal and a commercial risk.

6. 06

   Automatic renewal that is hard to stop

   Automatic renewal is not, in itself, a problem. It becomes risky where the client is not clearly informed, the notice period is unreasonable, or the contract is extended for long periods without genuine consent.

7. 07

   Restricting access to the courts

   Some contracts seek to impose complicated or costly procedures, or forums that are difficult for the weaker party to access. Any provision that makes it harder to defend one's rights should be examined closely.

8. 08

   Excessive non-compete or exclusivity

   In a commercial setting, non-compete and exclusivity restrictions can be useful, but they must be proportionate. If they unjustifiably limit a company's freedom to work with other partners, for too long a period or across too wide a territory, they can become problematic. Always check when a non-compete clause applies and the limits within which it is valid.

How do you identify unfair terms?

The first step is not to assess the contract on price alone. Many contracts look attractive at first but turn out to be costly because of secondary terms: penalties, fees, notification obligations, termination costs or conditions buried in the annexes. Look out for these four warning signs:

• No negotiation. If you are told the document is standard and cannot be amended, read it carefully. Standard contracts are not automatically unlawful, but they may contain provisions that unduly favour the party who drafted them.
• Unclear language. Terms such as “we reserve the right”, “at any time”, “as the case may be”, “in accordance with internal policies” or “at the supplier's discretion” may indicate an excessive margin of control for one party alone.
• Lack of reciprocity. Where one party is entitled to terminate the contract, change the price, suspend services or apply penalties while the other party has no equivalent rights, the contractual balance must be checked.
• Disproportion. Penalties, guarantees, deadlines and liability must be measured against the value of the contract and the potential loss. A low-value contract should not expose you to enormous financial risk for a minor breach.

Disadvantageous clause vs. unfair clause

Not every harsh clause is unfair. The difference comes down to five practical criteria, which you can check quickly before signing:

One step you can take tomorrow

Gather the contract, the annexes, the invoices and the terms and conditions you accepted into a single folder. With all the documents in one place, a legal review takes far less time and costs less.

Concrete examples of unfair clauses

A services contract may provide that the supplier can change the price unilaterally, without the customer being able to terminate. A leasing contract may include unclear additional costs or heavy early-termination penalties. A lease may require the tenant to bear repairs that are normally the landlord's responsibility. A software contract may require the licence to be paid for a full year, even if the service becomes unusable through the supplier's fault.

In the digital sphere, the risks are even more subtle. A platform's terms and conditions may limit the operator's liability excessively, allow an account to be blocked without explanation, impose unclear fees or shift the entire risk onto the user.

Unfair clauses in commercial contracts

In business, unfair or unbalanced clauses appear frequently in supply, distribution, franchise, services, software licence, consultancy, premises lease, joint venture and cooperation contracts. Unlike consumers, companies do not always enjoy the same special protection. That is why the responsibility for reviewing the contract is greater.

An entrepreneur should pay close attention to clauses on exclusivity, non-competition, penalties, warranties, intellectual property rights, confidentiality, termination, payment of invoices, limitation of liability and dispute resolution. A single badly drafted provision can bring a collaboration to a halt, cause losses or hold back the company's growth.

Unfair clauses in cryptocurrencies and on digital platforms

Contracts in the field of cryptocurrencies, blockchain, digital investments or trading platforms call for particular care. Many are governed by online terms and conditions, written in technical language and updated frequently. Without realising it, the user may accept severe limitations on the platform's liability, variable fees, account-blocking rules, withdrawal conditions or a complete transfer of risk.

At Buju, Stanciu & Associates, analysing such situations calls for a multidisciplinary approach: commercial law, civil law, criminal law, finance and technology. In cases of fraud, contentious investments or disputes involving digital assets, the contract should not be read in isolation, but together with the money flows, the commercial promises, the communications between the parties and the platform's technical mechanisms.

What if you have already signed a contract containing unfair clauses?

1. Do not act on impulse. Do not stop paying, terminate the contract or send aggressive notices without a legal review. The wrong reaction can be used against you.
2. Gather your documents. The contract, the annexes, the invoices, the notices, the emails, the screenshots from the platform, the terms and conditions you accepted and any evidence of how you were informed.
3. Consult a commercial lawyer. A lawyer can establish whether a clause is unfair, whether it can be challenged, whether an amicable settlement is possible or whether court proceedings are needed. Sometimes a well-drafted notice resolves the matter without litigation; at other times representation in court or a defence in enforcement proceedings is required.

Why consult a commercial lawyer before you sign?

A lawyer does more than check a contract's grammar. They assess the real risks: what happens if the other party fails to deliver, if the price rises, if delays occur, if the project stalls, if the partner breaches exclusivity or if a dispute arises.

A lawyer can also propose more balanced wording and negotiate the sensitive clauses. For companies, reviewing contracts in commercial law is not a needless cost but a protective measure.

A badly signed contract can cost far more than a legal review carried out in good time. Check before you sign. Once the problem arises, act with a clear strategy.

Conclusion

Unfair clauses can turn an apparently safe contract into a source of losses, deadlock and litigation. They are not always obvious and are not confined to complicated legal wording. They can lie in the price, the penalties, the termination provisions, liability, exclusivity, fees or digital terms accepted online. Prevention remains the best strategy - at Buju, Stanciu & Associates, every contract is reviewed not only in legal terms but also in practical terms, according to the real risk to the client.

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