Recent important amendments have been made to the Competition and Consumer Act 2010 (Cth) to increase the scope for a court to declare that certain terms in contracts are unfair. These expanded new laws will come into effect in November 2023.

The changes include new measures to protect vulnerable consumers. They also seek to substantially increase penalties for a wider range of businesses that engage in unconscionable conduct and have unfair terms in their standard form contracts. A standard form contract is a pre-written document which the consumer must accept – there is no option to negotiate any of the terms.

The law generally prohibits the proposal, application, or reliance on an unfair term in standard form consumer or small business contracts.

An unfair term in a standard form contract could be where:

  • it causes a significant imbalance in the parties’ rights and obligations arising under the contract;  and
  • it is not reasonably necessary to protect the legitimate interests of the party who would be advantaged by the term; and
  • it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.

Consumers should be able to question the contents of any proposed standard form contract. It could be unconscionable for a business to apply pressure upon the consumer to accept the agreement without having the opportunity to consider the contract carefully and to obtain advice about its terms if they wish. If a consumer is forced to urgently accept the terms of a contract, the consumer may potentially miss important provisions in the contract.

It is always prudent to seek advice before entering into any significant contract. Contact WGC Lawyers online today for expert Property Law and Commercial Law Advice.