The Federal Government has announced that it is bringing forward the start date of the new national consumer law to January 2010.
The Australian Consumer Law will cover the existing consumer protection provisions in the Trade Practices Act 1974 (Cth) (TPA), but promises to introduce broader and more pervasive consumer rights.
Identical legislation will be enacted by the federal, state and territory governments meaning the Australian Consumer Law will apply to all companies, businesses and individuals in Australia.
The content of the Australian Consumer Law is currently being developed by the Standing Committee of Officials of Consumer Affairs (SCOCA), acting under the auspices of the Council of Australian Governments. Last week, SCOCA released a paper, ‘An Australian Consumer Law: Fair Markets—Confident Consumers’ seeking public and stakeholder comments on further suggestions for reform.
Unfair terms
It is proposed that the Australian Consumer Law will regulate so-called ‘unfair terms’ in standard-form consumer contracts.
The definition of ‘unfair terms’ promises to be very broad, encompassing any term which causes a significant imbalance in the parties’ rights and obligations arising under the contract, and which is not reasonably necessary to protect the legitimate interests of the supplier.
The extent of the application of the new unfair terms provision is as yet undecided. Currently, the TPA defines a ‘consumer’ as a buyer who purchases goods or services costing no more than A$40,000, or goods or services of a kind ordinarily acquired for personal, domestic or household use or consumption. Under the Australian Consumer Law, the monetary threshold may be removed and the protections extended to goods used in business contexts.
Implications
Standard-form contracts are used in a variety of settings to provide consumer services. Industries which will be affected include utilities, communications, banking, transport software, media subscription and leisure.
Examples of terms which will potentially be rendered void by the proposed legislation include terms which:
- give the supplier rights to unilaterally vary a contract
- prevent a consumer from terminating a contract
- penalise only the consumer for breaching the contract, or
- increase the price charged for goods or services without allowing the consumer to terminate.
Submission on the proposed Australian Consumer Law are sought by 17 March 2009.
This article was written by Andrew Healer, Solicitor, Melbourne.
More information
For information regarding possible implications for your business, or for assistance in making a submission to the SCOCA report, contact