16 MAY 2013
Recent actions taken by the Australian Competition and Consumer Commission (“ACCC”) suggest the ACCC is giving more attention to enforcing the unfair contract terms legislation. This serves as a timely reminder of the need to review your standard trading terms to ensure the protections you seek to rely on are drafted in a way which will stand up to legal challenge.
In the last few weeks, the ACCC commenced legal proceedings in the Federal Court against Netspeed Internet Communications (an internet service provider) alleging certain clauses in Netspeed’s standard trading terms are unfair to consumers and void under the unfair contract terms legislation. The terms in issue include those which, in effect:
- allow Netspeed to unilaterally vary the price under the contract without providing the customer the right to terminate the contract;
- require the customer to indemnify Netspeed for loss suffered in any circumstance, even when the contract has not been breached or where the loss was in fact caused by Netspeed’s breach of contract; and
- allow Netspeed to unilaterally terminate the contract at any time, for any reason.
The action taken by the ACCC is significant in that it is the first time the ACCC has commenced proceedings based exclusively on the unfair contract terms legislation (which has been in force since July 2010).
The ACCC also recently released a report on clauses in other standard form contracts used across a number of industries (for example, telecommunications, vehicle rental and fitness) which it considered to be at risk of being declared void under unfair contract terms legislation.
With the unfair contract terms legislation squarely in the ACCC’s focus, now is a good time to review your standard trading terms and obtain advice about the risk of any of your trading terms running afoul of the legislation. We are also still seeing in the market today trading terms which refer to the now defunct Trade Practices Act which has been replaced by the new consumer protection legislation.
We would be pleased to assist you reviewing and updating your standard trading terms.
You are a valued Kinneally Miley contact, for more information related to this Legal Update please contact us.
[contactsbox] [leftcolumn]Contact Partner: Michael Coe
Direct Telephone : 07 3210 5709
Mobile Telephone : 0408 983 876
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