“It’s not fair!”
How many times have we heard this phrase? Whether it’s screamed by a quarrelling child, shouted by a door-slamming teenager, or hollered by an irate fan at a football match, I’m sure it is a phrase we are all familiar with.
From a young age we seem to develop a sense of what is and isn’t ‘fair’ in the World. It is therefore interesting that sometimes as consumers we are prepared to set aside any inner concept of ‘fairness’ and agree to just about anything in order to get a particular product or service that we want or need. Think about the last time you signed up to a mobile phone contract or booked an airline ticket or signed up for gym membership. Were you presented with a set of fine print terms and conditions to sign or click “I agree”? Did you read those terms before going ahead? Or, like many people, did you simply think “Well, I don’t really have a choice, if I want to get on that flight, I need to agree to whatever terms are put before me” or perhaps “Well, it’s a big business and I’m sure lots of other people have agreed to the same terms, so it must be ok”.
The ACCC’s Review of Standard Form Contracts
The Australian Competition & Consumer Commission (“the ACCC”) has recently conducted a review of ‘standard form contracts’ used in various industries including the airline, telecommunications, fitness and vehicle rental industries. On 14 March 2013, the ACCC released a Report on its findings. The review was conducted as part of the ACCC’s broader strategy in promoting compliance with the “unfair contract terms” provisions of the Australian Consumer Law that came into effect on 1 July 2010.
The 8 Key Issues
The ACCC’s report identifies 8 key issues that emerged during its review that raise concerns under the “unfair contract terms” provisions of the Australian Consumer Law, they are summarised as follows:
- Contract terms that allow the business to change the contract without consent from the consumer.
- Terms that cause confusion about the agency arrangement that apply and seek to unfairly absolve the agent from any liability.
- Terms that unfairly restrict the consumer’s right to terminate the contract.
- Terms that suspend or terminate the services being provided to the consumer under the contract.
- Terms that make the consumer liable for things that would ordinarily be outside of their control.
- Terms that prevent the consumer from relying on representations made by the business or its agents.
- Terms seeking to limit consumer guarantee rights.
- Terms that seek to remove the consumer’s right to a credit card chargeback facility when buying the service through an agent.
Real examples of each of the above issues are provided in the ACCC Report.
Broader concerns of the review
The ACCC also identifies some broader concerns that emerged during the review including where the contract:
- seeks to allow the business to use consumer personal details for broad purposes;
- seeks to limit the consumer’s ability to bring actions in Court;
- seeks to allow the business to use the consumer’s correspondence or communications for broad purposes; or
- is unnecessarily lengthy & complex.
These issues are relevant both from a consumer’s perspective and also from the perspective of a business that presents standard form contracts to its customers.
What does this mean for me as a consumer?
The ACCC Report, and in particular the 8 Key Issues, provides a helpful (although, perhaps not exhaustive) checklist for consumers. If you are presented with a standard contract by a supplier or service provider, then you should keep a look-out for terms like those described above, and get legal advice on any terms that you don’t understand or are concerned about, before signing the contract or clicking “I agree”.
What does this mean for me as a business?
As a business, you need to familiarise yourself with the “unfair contract terms” provisions of the Australian Consumer Law as it may apply to your dealings with your customers. It is often good business practice to have ‘standard terms & conditions’ that apply to your dealings with customers, but if those terms breach the Australian Consumer Law, then those terms might be unenforceable and could be the subject of enforcement action initiated by the ACCC, ASIC or other consumer protection agencies against your business. It is therefore a good idea to have your standard form contracts prepared or reviewed by a lawyer with contract and consumer law expertise before presenting them to potential customers.
For further information, please contact the author.
This article is posted in Adelaide, South Australia by Tri-meridian Corporate & Commercial Law and is intended to be used as a guide only. It is not, and is not intended to be, advice on any specific matter. We do not accept responsibility for any acts or omissions resulting from reliance upon the content of this article. Before acting on the basis of any material in this article, we recommend that you consult your professional adviser.