The proposed changes to consumer law that we described in our Spring edition of the DW Report (Are Your Contracts Void?) are expected to take effect after 1 July 2010.
The Trade Practices Amendment (Australian Consumer Law) Bill 2009 was passed by the House of Representatives on 17 March 2010 and is awaiting Royal Assent. Once this has been granted, the Bill will become part of the law of the Commonwealth, and will be known as the Trade Practices Amendment (Australian Consumer Law) Act 2009.
The Act, among other things, will significantly alter the relationship between suppliers and consumers and will render unfair contract terms in consumer contracts void.
During the passage of the Bill, some changes were made to it by the Senate. While most of these changes were not substantive, one change that should be noted is an amendment to the definition of an unfair contract term to include the requirement that it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.
As a result of this amendment, the consideration relating to detriment has been removed from the list of considerations that a Court must take into account in determining whether a term of a consumer contract is unfair.
Whether a specific term of a consumer contract is "unfair", and whether a specific contract falls within the scope of a "consumer contract", will be matters of statutory interpretation, and consideration will be given to the circumstances surrounding the contract. Obviously, businessto-business contracts will not generally fall within the category of a consumer contract.
If you are in the retail industry, residential leasing, or any other industry where your client or customer base includes individual persons who acquire goods, services or interests for personal, domestic or household use or consumption, you should review your contracts to ensure that any terms within those contracts will not be rendered void by the operation of the Act.
For an overview of the relevant provisions of the Bill, please see our article in the Spring 2009 edition of the DW Report, which is available on our website www.donaldsonwalsh.com.au. However, please be aware that, as mentioned above, changes have been made to the Bill since that article was written.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
