NOTE Nº 0638 · REV A

Unfair Terms in Building Contracts: What Doesn't Bind

Unfair terms in builder contracts under the Consumer Rights Act: the fairness test, the grey list, classic offending clauses and how to challenge them.

By The Renovation Notes Team · 3 min read · Published 29 August 2026

A close-up of a hand highlighting a contract, emphasizing important legal terms.

In short

Consumer contract terms that create significant imbalance against you: sweeping liability exclusions, forfeited deposits, unilateral price rises, punitive cancellation fees, fail the Consumer Rights Act's fairness test and simply don't bind, however clearly you signed. The core price and scope can't be challenged for fairness, but the small print around it can, and courts must consider it even if you don't raise it.

“But you signed it” is not the end of the argument. For consumers, English law reads the small print with a hostile eye: terms that stack the deck unfairly against you can be struck from the contract entirely, and the builder’s own standard terms are exactly where such clauses live. Knowing the doctrine turns fine print from a threat into a negotiation.

The fairness test

Under Part 2 of the Consumer Rights Act 2015, a term in a consumer contract is unfair, and therefore not binding on you, if, contrary to good faith, it causes a significant imbalance in the parties’ rights to your detriment. Two supporting rules sharpen it: terms must be transparent (plain language, legible) and prominent; and genuine ambiguity is read in your favour. The main carve-out: the core bargain, the price itself and the main subject matter, isn’t assessed for “fairness” (the law polices the small print, not whether you struck a good deal), provided it was transparent and prominent.

Courts must consider fairness of their own motion in consumer cases, a judge can disapply a term even if you never thought to argue it.

The grey list, translated to building sites

The Act carries an indicative “grey list” of suspect terms. The building-trade greatest hits:

Total liability exclusions, “no responsibility for any damage howsoever caused”. Attempts to exclude liability for death or personal injury from negligence are automatically void; sweeping property-damage exclusions face the fairness test and usually fail it.
Deposit forfeiture, “all deposits non-refundable in any circumstances”, regardless of who cancelled or why. Compare the lawful deposit position.
Punitive cancellation fees, charges bearing no relation to actual loss (and check your statutory cooling-off rights sit above any contract wording).
Unilateral variation, the trader may raise the price or change the spec at will, while you remain bound. A genuine, transparent cost-escalation mechanism is one thing; “prices subject to change” is another.
Asymmetric remedies, the builder may terminate freely but you face penalties; interest at extortionate rates on late payment by you, silence about late performance by them (compare a fair delay-damages clause, which cuts the other way).
“Sign-off means acceptance of everything”, clauses deeming all work approved on final payment, defeating your defects rights.

Standard-form contracts drafted by neutral bodies, the JCT homeowner forms, are largely free of this genus, which is quietly one of the best reasons to insist on them.

Using the doctrine

Before signing: challenge grey-list terms directly, “this clause wouldn’t survive the CRA fairness test; let’s strike it or use the JCT form”. A builder’s response to that sentence is vetting data all by itself.

In a live dispute: when a builder brandishes a clause, the forfeited deposit, the excluded liability, the £900 “admin fee”, answer on paper: the term creates significant imbalance, you’ll rely on Part 2 CRA, and you’re proceeding on your statutory rights. Then run the normal escalation; adjudicators and district judges see these clauses weekly and strike them without ceremony. The rest of the contract survives (the offending term is severed), so your own rights under it remain intact.

The mirror rule: fairness cuts both ways, a homeowner-drafted contract stuffed with one-sided penalties invites the same treatment. The contracts pillar’s checklist is balanced by design, and balanced paper is what actually gets signed.

This guide is general information for homeowners in England and Wales, not legal advice.