When two parties sign a contract, the general rule is that they’re bound by the terms they’ve agreed to. But what if a clause is clearly unreasonable, unbalanced, or abusive? Under Swedish law, there are legal protections against such terms—known as unfair contract terms.
.
In this article, we explain what is considered unfair under Swedish contract law, how courts handle such clauses, and what you can do if you’re faced with an unfair agreement.
.
.
What Is an Unfair Contract Term?
An unfair contract term is a clause that is so unreasonable or one-sided that it should not be enforceable under the law. Examples include:
.
-
Excessively high fees or penalties
-
Clauses that favor one party disproportionately
-
Waivers of key rights (e.g., no right to complain or claim damages)
-
Hidden terms in standard contracts
.
.
What Does the Law Say?
Under Section 36 of the Swedish Contracts Act (Avtalslagen 1915:218), a contract term may be adjusted or declared invalid if it is unfair, considering:
.
-
The content of the agreement
-
How the agreement was formed
-
Any changes in circumstances
-
The relative strength of the parties
.
This gives Swedish courts broad discretion to modify or strike down unfair clauses—or even the entire agreement, in extreme cases.
.
.
Examples of Unfair Terms
-
A company denies the consumer any right to return or complain about a defective product
-
A standard form includes a penalty of SEK 500,000 for minor delays
-
A business excludes its liability for personal injury
.
.
What Applies in Consumer Contracts?
Consumers are particularly protected under Swedish law. According to the Act on Terms in Consumer Contracts (1994:1512), unfair terms are not allowed, even if the consumer agreed to them.
.
The Swedish Consumer Agency (Konsumentverket) has the authority to investigate and prohibit the use of unfair terms in standard agreements.
.
.
How Do Courts Assess Whether a Term Is Unfair?
Swedish courts carry out a case-by-case assessment, taking into account:
.
-
Whether the agreement was individually negotiated or pre-written
-
If the party had a real chance to understand the clause
-
Whether one party had significantly stronger bargaining power
-
Whether the term is disproportionate to its intended purpose
.
.
What Can You Do If You Encounter an Unfair Term?
-
Object in writing – Let the other party know you do not accept the term.
-
Negotiate – Ask for the term to be revised before signing.
-
Seek legal advice – Especially for high-value or long-term contracts.
-
Refuse to comply with the term – But do this carefully and with legal support.
-
Take it to court – If the other party insists on enforcing an unfair clause.
.
.
Summary
A contract term can be formally valid but legally unenforceable if it is considered unfair. Swedish law allows both consumers and businesses to challenge abusive or clearly unreasonable clauses.
.
If you come across a contract term that seems unfair—get legal advice before signing or performing the contract. It could save you from costly consequences or future disputes.
