New unfair contract laws at federal level

The introduction of the Australian Consumer Law Bill (“the Bill”) in the House of Representatives on 24 June 2009 has been the first step towards developing a single national consumer law. The Bill will come into effect on 1 January 2010 if successfully passed.

The Bill focuses on protecting consumers from unfair terms that may appear in standard form contracts – contracts which are not negotiated by the consumer, such as those with telecommunications, utilities and financial services. It also provides new penalties, powers of enforcement by the ACCC, and avenues for consumer redress in cases where the new provisions are breached.

As businesses are increasingly operating on a national level, the Bill aims to make it simple for companies to comply with their obligations to consumers, by eliminating the burden of having to comply with the different consumer protection provisions that currently exist in the states and territories.

At present, the Fair Trading Act 1999 (Vic) regulates unfair contract terms between businesses and consumers in Victoria.

In anticipation of the introduction of the new consumer law, businesses should revisit their standard contract terms to ensure that they are appropriately balanced to ensure that they will not be deemed unfair.

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