The Australian Consumer Law (“ACL”) makes void terms in standard form consumer contracts that are unfair.

The Australian Competition & Consumer Commission (“ACCC”) recently reviewed standard form consumer contracts in the airline, telecommunications, fitness and vehicle rental industries, as well as some contracts used by online traders and travel agents.

The ACCC identified the following types of terms as being likely to fall foul of the ACL’s  fairness requirement.

  • Contract terms that allow the business to change the contract without consent from the consumer.
  • Terms that cause confusion about the agency arrangements that apply and that seek to unfairly absolve the agent from 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 remove a consumer’s credit card chargeback rights when buying the service through an agent.

At the moment, the unfair terms provisions of the ACL only relate to standard form consumer contracts for the supply to an individual of goods or services wholly or predominately for personal, domestic or household use or consumption.

The federal Coalition has stated that if it is successful at the next election, it will move to extend the unfair terms protections to small business consumers.