Unfair Contract Terms to Become Unlawful

The unfair contracts regime in the Australian Competition and Consumer Act is about to get some teeth.

Although some time ago policy makers recognised that consumers practically lack time, expertise and bargaining power to choose with whom to contract, whether to contract or not and on which term to contract, the current regime is difficult to comply with and lacks any real ability to impact consumers.

According to the communique from the meeting of minsters for consumer affairs, soon:

  • unfair contract terms will be unlawful and courts will receive the power to impose a civil penalty;

  • courts will be able to determine an appropriate remedy, rather than the term being automatically void;

  • the eligibility threshold for the protections will lift from less than 20 employees to less than 100 employees; and

  • certain price limitations in order for a contract to be covered by the regime protections will be removed;

There is no doubt the balance between ‘freedom to contract’ and consumer protection continues to tilt towards favouring consumers, and we hope the legislation will improve clarity around the definition of standard-form contract and what constitutes an unfair term.

For business, it’s time to check whether you will be caught by the updated thresholds and review your standard form contracts, (usually in the form of your terms of trade or standard terms and conditions) to ensure they are compliant.

For more information, please contact:

Paul Gray
T: 03 5225 5231
E: pgray@ha.legal

Alexander Gulli
T: 03 5226 8573
E: agulli@ha.legal

Paul Gray

Principal - Harwood Andrews

Paul is a Principal at Harwood Andrews. He brings a commercial approach to the law from a broad set of experiences as a business owner, private legal advisor and in-house counsel, and having worked with management teams over many years. Paul is valued for distilling issues down to what is really important and being prepared to make a risk call based on judgement and experience.

Paul’s key areas of practice include:
- commercial contracts and advice;
- business and share capital structuring;
- sale and purchase of business;
- procurement and service arrangements;
- technology, intellectual property, data protection and start-ups;
- consumer law;
- corporate advisory, including , company secretarial and directors' duties, shareholder relations; and
- capital raising and financing requirements

Paul also manages Harwood Andrews’ corporate counsel advisory service, built on a decade of experience as a client and managing legal functions within one of Australia’s biggest corporations.

Paul believes that evolving how legal services are delivered can be a win-win for lawyers and their clients, particularly how on how technology impacts the legal profession, legal advice and the delivery of efficient legal services.

Paul’s professional commitments include:
- Member of the Law Institute of Victoria
- Member of the Law Institute of Victoria’s Technology and the Law Committee

Harwood Andrews