In response to concerns raised by the OFT, Dell Corporation Ltd will change its terms and conditions to make them fairer to consumers.

The OFT identified a number of terms that it considered to be inconsistent with the requirements of the Unfair Terms in Consumer Contracts Regulations 1999 or The Consumer Protection (Distance Selling) Regulations 2000 and therefore unsuitable for use in consumer contracts.

Dell has agreed to erase two crucial limits to its own liabilities for equipment it sells. Its liability for negligence will no longer be capped at the price of the product, and it will remove a term which excluded liability for consequential loss arising out of breach of contract.

The other two changes made by Dell are less controversial. It has changed the term which "excluded liability for oral representations not confirmed in writing" and another that "required the consumer to notify Dell of any errors in its confirmation of the consumer's order immediately".

Christine Wade, director of consumer regulation enforcement for the OFT, said: "Distance selling, be that by mail, phone or the internet, does not exclude businesses from ensuring their contracts are fair to consumers and compatible with the law. I'm pleased that Dell has worked with the OFT to modify important aspects of its terms and conditions, such as those relating to time of delivery and liability for faulty goods, in the light of the OFT's concerns."

The OFT’s actions are significant: this is the first time they have gone after a large computer seller and indicates that non-compliance with their distance selling guidelines (issued in December 2005) will be taken seriously. Businesses should expect further interventions by the OFT to ensure that the terms of distance selling contracts are fair to consumers.

Click here for the OFT guidance on IT consumer contracts made at a distance.