On 3 March 2010, the Federal Government announced that it had
accepted the expert panel's recommendations to amend the
unconscionable conduct provisions of the Trade Practices
Craig Emerson MP, Minister for Small Business, Independent
Contractors and Service Economy, has announced that:
the unconscionable conduct provisions of the Act would be made
clearer to aid courts in interpretation, help regulators with
enforcement and help people understand what is and is not
the changes would make it clear that the law covers behaviour
before an agreement is entered into, the actual contents of the
agreement and in its ongoing operation
regulators will have a stronger basis for taking action and
enhanced powers to do so and courts will have better guidance
the clarification will complement the new penalties for
offenders introduced as part of the Australian Consumer Law.
The Federal Government has released the expert panel's
report, entitled Strengthening statutory unconscionable conduct
and the Franchising Code of Conduct (Report), which found the
A list of examples of unconscionable conduct would not improve
understanding or implementation of the unconscionability provisions
of the Act.
The expert panel considered that a list of examples may result in
"misdiagnosis" of unconscionability by those reading them
because a finding of unconscionable conduct depends upon the
specific facts and circumstances before a court in a particular
case. Further, they considered that it is not possible for a list
of examples to comprehensively cover the broad range of industries
and circumstances in which unconscionable conduct may arise under
the general provisions of the Act in a way that would be
Interpretive principles would assist courts in interpreting the
provisions, stakeholders in understanding them and regulators in
enforcing them. However, the expert panel did not support a
statement of principles that operate as mandatory considerations as
envisaged by the Senate Committee. Drawing from existing case law
and policy intentions of current and previous governments, the
panel recommended the following interpretive principles:
that courts may examine the terms and progress of a contract
when examining the conduct alleged to be unconscionable (this
emphasises an amendment to which the Government has already
the provisions may apply to systems of conduct or patterns of
it is not necessary to identify a special disadvantage to
attract the application of the provisions.
In addition, the expert panel recommended that:
regulators (the ACCC, ASIC and state regulators) develop
uniform national guidance on the statutory unconscionable conduct
similar to those being prepared for the new unfair contract terms
regulators pursue further test cases to achieve further
as part of the ACL, the Government consider harmonising or
unifying the separate unconscionability provisions that currently
exist for consumer and business transactions under the Act and
the effectiveness of the changes currently being introduced and
those introduced as a result of their Report be assessed after
three to five years.
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The Sportscraft refunds and returns policy limitations went beyond consumer's rights under the Australian Consumer Law.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).