1 December 2020
From Katarina Klaric (Principal & Director) and Peter Divitcos (Lawyer), Stephens Lawyers & Consultants
Standard form contracts are being subjected to increased scrutiny for unfair contract terms by regulators. On-line terms and conditions are of particular concern because consumers are often given no choice but to accept onerous or unfair terms if they wish to proceed with the purchase of goods or services.
Recent enforcement proceedings undertaken by the Australian Competition and Consumer Commission (“ACCC”) in respect of unfair contract terms provide guidance as to the types of contractual terms that could be deemed to be unfair and unenforceable, resulting in significant reputation damage and financial loss to the company. Restraint of trade and non-disparagement clauses which are often included in standard form contracts to protect the business, its goodwill and reputation, may be considered to be unfair by ACCC or the court if they extend beyond what is reasonably necessary to protect the legitimate interest of the business.
Businesses using standard form contracts or involved in e-commerce should review their terms and conditions for unfair terms to minimise the risk of terms being declared unfair and unenforceable.
This update from Stephens Lawyers & Consultants references recent enforcement activities by the ACCC and provides some strategies for risk minimisation.