New unfair contracts terms laws
New national laws that aim to protect consumers from unfair contract terms in standard-form contracts are expected to be passed soon by the federal parliament.
When the laws were proposed, the then Federal Minister for Competition Policy and Consumer Affairs, Chris Bowen, said they would give consumers more certainty and reduce compliance costs for business.
It is anticipated the laws will say that a contract term is unfair if it creates imbalanced rights or obligations without good reason and that courts must consider how ‘transparent’ the term is.
There has been some discussion about the anomalies that could arise from this approach, with its emphasis on the importance of transparency. For example, an imbalanced term of a contract might be unfair if it is on page 21 of the contract in ordinary or even small print, but considered fair if it is on page 1 of the contract in bold type. This is because in the first case, the term is potentially obscured, but in the second, it is obvious.
It is a plus for consumers that the new laws put the telecommunications industry on notice: they need to make sure their contracts include fair terms.