OFT raps Dell's knuckles over contract terms

Computer giant Dell has been forced to improve its terms and conditions for consumers, after the Office of Fair Trading voiced its concerns

The Office of Fair Trading (OFT) has negotiated changes to Dell's sales contracts, after a large number of consumer complaints over terms and conditions.

Although the OFT declined to identify the exact terms it found contentious, it said that Dell has agreed to improve the transparency of its consumer agreements, and separate terms that are applicable to consumers from those that apply to business.

Dell confirmed it would also attempt to "improve the clarity" of the terms by "seeking to remove legal jargon", and by improving the clarity of "certain provisions which the OFT felt might be capable of being misunderstood" — in other words, by making potentially ambiguous terms clearer.

Although Dell has accepted the changes, it has not yet reprinted its contracts or updated its Web site — where the original terms and conditions can still be seen.

"The OFT received advice from Consumer Direct and Trading Standards of a large number of consumer complaints, so met with Dell to review its terms and conditions," an OFT spokeswoman told ZDNet UK.

Dell and the OFT have been negotiating since February, and negotiated an agreement "recently", said the spokeswoman.

The OFT discussed a number of terms with Dell that it considered to be inconsistent with the Unfair Terms in Consumer Contracts Regulations 1999 or The Consumer Protection (Distance Selling) Regulations 2000. This meant they were "unsuitable for use in consumer contracts," said the OFT.

Dell has agreed to change terms that could limit "liability for negligence to the price of the product," said the OFT.

"If you buy a computer for £100, the company can't say it's only liable for the cost of the computer if something goes wrong. Negligence can't be limited to the price of the product, but also what's affected by it. Say a company sells and installs a faulty heater, which catches fire and burns your curtains. They are liable both for the heater and the curtains," said the spokeswoman.

The computer giant will also change terms that exclude "liability for consequential loss arising out of breach of contract".

"Any liability for loss arising out of breach of contract can't be excluded," said the OFT spokeswoman. "If you had a business that relied on the use of a computer, and suffered loss of money or any other loss because the contract was breached, you can't exclude liability for that loss."

Dell also agreed to change terms which "excluded liability for oral representations not confirmed in writing", and those that "required the consumer to notify Dell of any errors in its confirmation of the consumer's order immediately."

"If you have a conversation over the telephone, any agreement made is an oral contract. You can't exclude liability for oral contracts," explained the OFT spokeswoman. "If someone goes on holiday, you can't say you must notify them immediately of an error in a customer order."

Dell itself said it had agreed to "routine" changes to its terms and conditions, and said that the review related "only to the document itself and not to Dell's business behaviour or operational practices". Dell had not commented at the time of writing on the "large number of consumer complaints" that the OFT said had led to the review in the first place.

"As a result of the review, our terms and conditions are now written in a much clearer language to the benefit of our customers," said a Dell spokeswoman.

Dell declined to comment on the exact terms and conditions that had been altered, but said that the new terms would be posted online after paper contracts had been reprinted.

"We are currently in the process of reprinting our contractual documentation as a result of the review with the OFT," the Dell spokeswoman told ZDNet UK. "In order to avoid confusion we will synchronise the posting of the new terms on our Web site with the availability of the print documents."