Agreeing to contracts that you can’t vary.
These types of contracts are commonly known as a standard form contracts. Usually, the vendor of services or goods will prepare the contract, and the other party has no opportunity to negotiate the terms. The contract is generally a “take it or leave it” type of offer.
The terms in these contracts generally define the service or good, set out the price of the service and outline any conditions, restrictions, or obligations upon the consumer in relation to the service or good. These terms are governed by the “unfair contract terms” provisions of the Australian Consumer Law (ACL).
Generally speaking, the ACL provisions deem terms which provide unilateral rights that skew the contract in favor of one party as being unfair. The most common examples of these are where there are terms that only allow one party to:
avoid or limit their obligations under the contract;
terminate the contract;
impose penalties for breaching or terminating the contract; or
vary the terms of the contract.
Earlier this year, we saw ASIC take action against Bank of Queensland (BoQ) for a range of terms in its standard form contract that afforded BoQ the right to unilaterally determine the occurrence of a default and the events that led to that default, enforce an indemnity requiring the client to indemnify BoQ’s losses, and to unilaterally vary the contract.
The court held that these terms were unfair and void, and that those terms must be replaced with fair terms as agreed. These orders applied to all contracts from 12 November 2016 onwards
Should you have any concerns regarding a possible standard form contract, Longton Legal’s commercial team are ready to assist in advising you or, where necessary, enforcing your rights.
*Disclaimer: This is intended as general information only and not to be construed as legal advice. The above information is subject to changes over time. You should always seek professional advice beforetaking any course of action.*
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