Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
Unfair contracts (and how to avoid them)
Lucy Miller
14th Jun 2020
Got a new contract to sign and feeling more than a bit befuddled by all the technical terms? Feel like your landlord or new gym might be trying to take you for a ride? You might be right. But there’s no reason for anyone to have to put up with unfair contracts in this day and age. Read on for the things that you should look out for, whatever contract it is that you’re signing…
- Job contracts
- Unfair contracts at the gym
- Unfair contracts for phone and broadband
- Tenancy agreements
Job contracts
First up, an important one!
A lot of the time, if we’ve just been told an offer is being made to us for a new job we’re going to be pretty excited. That could mean we’re less likely to spot unfair terms in our contracts, though. That’s something you should avoid at all costs. An unfair contract at work could have a serious negative effect on your day-to-day life, so make sure you check it carefully before you sign! Here’s what to look out for:
- Being asked to sign on the spot: no company should do this. You need time to take your contract away, read over it carefully, and seek advice if needed. You shouldn’t be pressured into signing it whilst you’re sat in with HR, even if they’re giving you time to read it. Watch out for this!
- The salary: ensure that it’s the salary that you discussed, and that when you’ll be paid (weekly, monthly, etc) is made clear. If not, request that the change be made and make it clear you won’t sign until it is. Make sure it guarantees National Minimum Wage – including overtime – so work out the hourly rate offered, too.
- Unpaid overtime: use your judgement on this, depending on your job role. As an exec in an advertising firm, you might expect to work beyond your contracted hours. As a public sector employee, you certainly shouldn’t. If you believe the contract is pushing you into accepting unpaid overtime that’s unwarranted, question it
- Flexibility: this is something that will be more important to some people than others. If you’re a parent, a carer or have other commitments outside work, it’s likely you’ll need some flexibility. Make sure it’s in your contract to avoid an unfair situation later on
- The benefits package: there’s a lot that should be covered here. Make sure your contract covers sick pay, holiday pay, parental leave, and compassionate leave. You might never need a lot of these things (although you will certainly need your holidays!) but it’s imperative that they’re there in case you do
How to resolve a query
If you think there might be part of your job contract that’s unfair, you could ask a more experienced relative or friend to look over it for you. You could even talk to Citizens Advice, if the situation warrants it.
Sometimes, unfair contracts come up at work when you’re already employed. For example, your employer might want to change how holiday is taken or your office hours or location. If you can’t resolve any issues between yourselves, get in touch with ACAS for mediation and help.
Unfair contracts at the gym
One of the most common complaints that Citizens Advice gets is about gym contracts (yes, really).
We’re not quite sure why gyms are so rubbish and drawing up fair contracts, but unfortunately it looks like they are. Here are a few things that you need to look out for if you’re joining a new gym…
- How much notice you’ll need to give to cancel: in good and responsible gyms, this will be a month (more info on this here)
- Freeze periods: a decent contract allows you to freeze payments if, for example, you’re taken ill or will be away for a period of time
- Automatic renewals: get this taken out of the contract, especially if you’re only going to be using the gym for a short amount of time
- Minimum terms that are longer than a year: this is not a good sign. Don’t sign up for it!
- A clause that says the fees could increase mid-contract: again, this is unfair and needs to be removed
Unfair contracts for phone and broadband
One of the contracts that we’re most likely to keep running without question is the one that provides our internet, and by extension our connection to the outside world. There’s a strong likelihood that lots of us are paying too much for our phone and broadband contracts. It’s easy to let them run on out of ‘special rate’ periods without noticing. Here’s how to make sure you aren’t…
- Look for payment increases when the initial offer period ends. Yes, we’re looking at you market leader in internet and TV services! That 18-month introductory offer sounds great now, but make sure you know how much it’ll end up costing once the offer period is over. It might be more cost-effective to go with a cheaper provider from the outset… and be honest, are you really going to watch those boxsets? Alternatively, check how long the contract is. Often, the 18-month introductory deal is for an 18-month contract, so you can exit after that without penalties.
- Huge roaming costs. There’s a chance that the free roaming that we currently enjoy in Europe will end along with the Brexit transition period. If you’re getting a new phone contract before the end of this year, make sure you ask what the network provider’s plans are for holiday roaming.
- Extortionate exit fees. If you want to leave your contract before it’s over, can you do so without huge exit fees? It’s likely you’ll need to pay something – but only if you leave the contract by choice. If they don’t provide internet to your new home, for example, you should be able to cancel penalty-free.
It’s actually a good idea to shop around for broadband every year. This way, you can go back to your current provider and renegotiate with the other deals you’ve found in your back pocket. More often than not they’ll price match. They want to keep your custom and not have you telling other people they’ve got unfair contracts, after all!
Tenancy agreements
Landlords and estate agents get a bad rep a lot of the time, and whilst it’s not always justified it is still important to make sure there are no unfair or illegal clauses in your tenancy agreement. Look out for the following, and flag it directly if you do find a problem:
- Tenancy deposit schemes: your deposit needs to be protected in one of these schemes by law, and this needs to be stipulated in your contract. Tenancy deposit schemes ensure your deposit is held in a neutral place (i.e., not your landlord’s bank account) and protect you at the end of the contract
- Break clauses: get a break clause put in your contract, if there isn’t one there already. This is especially important if you’re signing a multi-year lease
- Agency fees: agency fees have been illegal for new tenancies since 1st June 2019. From 1st June 2020 they are illegal for all tenancies. Say it louder for those in the back!
- No mention of limitations on landlord visits: this is your home for the duration of your tenancy, and your landlord needs to treat it as such. That means 48 hours notice if they want to come round, unless in case of an emergency. Get it in writing.
We hope this article will give you confidence when negotiating contracts in the future. Got a question you need the Money Magpie community’s advice on? Find the answer over on the forums.
Some very sound advice.
An important article. A shame we need it due to so many unscrupulous people!