The unfair contract terms provisions commenced on 1 July 2010.
Background
On 17 March 2010 the Trade Practices Amendment (Australian Consumer Law) Act (No.1) was passed as law. Under these laws there are provisions regulating unfair contract terms (UCT).
A term in a standard form consumer contract is unfair if:
- it would cause a significant imbalance in the parties’ rights and obligations arising under the contract; and
- the term 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.
The UCT provisions will apply only to standard form consumer contracts—for example, contracts for the supply of goods or services to an individual whose acquisition is wholly or predominantly for personal, domestic or household use or consumption.
Draft document
Draft - Australian Consumer Law: A guide to unfair contract terms ( PDF 267.98 KB )
Consultation with stakeholders
To ensure that the development of guidance on unfair contract terms assists stakeholders to understand the requirements and obligations on business under the new laws, the Australian Competition and Consumer Commission (ACCC), the Australian Securities and Investment Commission and state and territory consumer protection agencies invited stakeholder comment on the draft guide.
The ACCC encouraged interested parties to consider providing comments on the guidance, including recommendations that would better assist stakeholders understand the new obligations on business under these laws.
Specifically, the ACCC is sought comment on the following questions:
- Does the guide clearly outline the obligations on business arising from the new laws?
- What types of information would better assist stakeholders understand the requirements on businesses arising from the laws?
- What if any additional information would better assist stakeholders to understand the new laws?