It was only a matter of time before we started seeing the ACCC taking action for unfair contract terms. Pretty much any contract we sign or agree to as a consumer is a ‘consumer contract’. This includes all those terms and conditions that we click “I accept” before we make an online purchase. You may be surprised at the number of consumer contracts that your business has: lay-by terms, website terms, website purchase terms, standard purchase conditions – the list can go on.
In 2010 it became illegal to have an unfair consumer contract. In 2014, the ACCC has focused its enforcement efforts in this area.
A contract is unfair if a term causes a significant imbalance in rights/obligations; is not reasonably necessary to protect the legitimate interests of the party who would be advantaged by the term; would cause detriment if it were to be applied or relied upon.
The fines and not to mention, reputational damage, can be very costly if the ACCC determines that your consumer contracts are unfair.
The new year is a great time to take stock of your consumer contracts and review their terms to determine whether they could constitute unfair consumer contracts.