Australian Unfair Contract Terms Laws effective 1 July 2010

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Unfair Contract Terms

The following summary is based on information available from www.accc.gov.au.

The unfair contract terms law commenced on 1st July 2010 and apply nationally as well as in Victoria and New South Wales

What is unfair?

●A term in a standard form consumer contract is unfair if:

oit would cause a significant imbalance in the parties’ rights and obligations arising under the contract; and

othe term is not reasonably necessary to protect the legitimate interests of the party who would be advantaged by the term; and

oit would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on

●When deciding whether a term is unfair, the court must also consider the contract as a whole, and how transparent the term is within the contract

How will the new law be enforced?

●To help industry, business and legal practitioners under the new law, the agencies have developed a Guide to the Unfair Contract Terms Laws
which is accessible here on the ACCC website.

●While the ACCC and ASIC will be enforcing the unfair contract terms provisions from 1 July 2010, the implementation of the ACL by the states
and territories may vary. Many states and territories, however, do intend to implement the legislation at the same time as the ACCC and ASIC

●Although regulators such as the ACCC may seek the cooperation of business in removing terms considered potentially unfair, it is not the role
of any regulator to endorse contract terms or to state categorically that they are unfair. Only a court can determine if a term is unfair or not

●A term declared by a court to be unfair is not binding on the consumer

●The laws apply to contracts that are entered into on, or after, 1 July 2010, and to terms of existing contracts that are renewed or varied on or
after 1 July 2010

For more specific information, refer to the ACCC website