In 2010 the Federal government introduced new laws providing for
unfair terms in standard form consumer contracts to be void. In
January 2011, these laws became part of the Australian Consumer
Law, which has standing as law on a Federal and State level.
Mr and Mrs Malam purchased a table from the auction web site
graysonline.com. The table had a glass top. The auction was on
terms requiring the goods to be picked up by the buyer, and the
Malams arranged a courier to pick up their purchase. When it
arrived, the glass was smashed and other parts of the table were
bent. Mr Malam signed up for the user account with graysonline.com,
and like most people entering contracts online, clicked the
without reading the them.
There was evidence that the goods were broken at the time they
were picked up. Graysonline sought to rely on terms of the user
agreement that purported to deny the buyer the right to return
goods that had been picked up, once they had left the warehouse.
The CTTT found that the terms were not reasonably transparent for
reasons including that the terms were part of a 13 page agreement
that was provided online. Transparency of the terms is one of the
factors that courts and tribunals must consider when deciding
whether the terms are unfair.
While this is a decision of a tribunal rather than a court, it
is likely to have considerable influence over the interpretation of
the unfair terms laws in New South Wales, as disputes under those
laws will normally be heard in the CTTT rather than in New South
Especially in the case of online agreements, businesses who are
supplying to consumers should take some care to ensure that the
agreement is clear and concise. A 20 page agreement to buy a box of
crayons is disproportionate to the transaction (no matter how darn
great those crayons are) and likely to leave a court or tribunal
with a lot of sympathy for the consumer who says they did not read
it. In the context of this decision, the saying "less is
more" takes on a very literal meaning – making an
online agreement too long increases the chance of some of the terms
Service providers and online merchants should undertake careful
review of their online agreements to see what parts they really
need and eliminate parts they do not so as to increase the chances
of the agreement being enforceable. Generally, the length of the
agreement that will be enforceable may be related to the size and
importance of the transaction involved.
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.
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The Federal Court decision is likely to encourage the ACCC to maintain unconscionable conduct as an enforcement priority.
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