A guide to the unfair contract terms law, helps businesses understand their rights and obligations under the new Unfair Contract Terms (UCT) law which commences on July 1 this year.
A guide to the unfair contract terms law is a new publication available today that was developed jointly by the Australian Competition and Consumer Commission (ACCC), the Australian Securities and Investments Commission (ASIC) and state and territory consumer protection agencies.
Many industries – including telecommunications, health and fitness, travel, utilities and building – use standard form contracts and it is common for consumers to be offered the same or a similar ‘standard form’ contract that is generally not subject to negotiation.
“The UCT law is designed to address the detriment that can arise in circumstances where consumers are offered contracts on a ‘take it or leave it’ basis and those contracts contain terms that are unfair,” ACCC deputy chair Peter Kell said today.
“Where necessary, the ACCC will take further steps, including enforcement action, if faced with a contract term it believes to be unfair to consumers,” Mr Kell said.
The ACCC is also developing additional guidance for small business and consumers to further their understanding of this new law and these materials will be available from 1 July.
The UCT law is part of the Trade Practices Amendment (Australian Consumer Law) Act (No.1) 2010 which was passed by Parliament in March 2010 and applies to standard form consumer contracts.
Under the law, a term in a standard form consumer contract is considered to be unfair if:
- it causes significant imbalance in the parties’ right 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.
A guide to unfair contract terms is available to download from here.