Each month as a part of Mills Oakley’s Litig8, we bring to you snapshots of eight key cases, legislative changes or other legal events. The summaries are not comprehensive and do not constitute legal advice. You should seek professional advice before taking any action based on the content of this email.
Part 6 of the March edition of Litig8
From 12 November 2016, amendments to the Competition and Consumer Act 2010 (Cth) and Australian Securities and Investments Commission Act 2001 (Cth) will take effect which extend the consumer unfair contract term provisions. We provide a recap of those upcoming changes for you.
The purpose of the changes to the legislation is to extend the consumer unfair contract term provisions in the Competition and Consumer Act 2010 (Cth) (ACL) and the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) to cover certain small business contracts.
A ‘standard form contract’ refers to a contract that has been prepared by one party is not subject to negotiation and is offered on the ‘take it or leave it’ basis. Typically, these contracts are used for the supply of goods and services to consumers in many industries, including telecommunications, finance, domestic building, gyms, motor vehicles, travel and utilities
The law will apply to a ‘standard form contract’ that is entered into or renewed on or after 12 November 2016 (or if varied after that date, to those variations) which:
A party must satisfy three tests in order for a term in a standard form contract to be deemed unfair. They are:
If the Court deems that the terms are unfair, Courts will have the power to declare that a term of a standard form small business contract is void or if the contract cannot operate without the term, the entire contract can be declared void.
For more information, please contact:
Ariel Borland | Partner
T: +61 3 9605 0015