Consumer Law Update: Unfair Contract Terms

POSTED BY
Olivia Porter
16 June 2014

posted in Legislation | Consumer Law | Fair Trading Act

VIEWED 3593 TIMES

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On 17 March 2015 new rules regarding “unfair contract terms” come into effect. The rules only apply to a “standard form consumer contract”, which, generally speaking, is a contract between a supplier and a consumer (a person who acquires personal, domestic or household goods or services) that hasn’t been negotiated between the parties. A term is unfair when it:

  • would cause significant imbalance in the parties’ rights and obligations;
  • is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and
  • would cause detriment to a party if it were applied.

The FTA will include a list of example terms which may be unfair contract terms, including clauses which limit one party’s right to sue another party, or which allow one party to unilaterally vary, renew or terminate the contract. 

Suppliers should start reviewing their standard form consumer contracts now to ensure they do not include any unfair terms by the time the new rules come into effect next year.

POSTED BY
Olivia Porter
16 June 2014

posted in LegislationConsumer LawFair Trading Act

VIEWED 3593 TIMES

PERMALINK

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