The unfair contract terms (UCT) regimes under the Australian Consumer Law (ACL) and the Australian Securities and Investments Commission Act 2001 (ASIC Act) have been high on the reform and enforcement agenda over the last 12 months.
Not only has the ACCC commenced proceedings against Fuji Xerox in the Federal Court alleging that its standard form small business contracts contain a total of 173 unfair contract terms, but more recently, the federal, state and territory Ministers for fair trading and consumer protection have agreed to extend the reach of the UCT laws and to impose pecuniary penalties for the use of UCTs.
What you need to know
- Significant reforms to the UCT regimes have been announced.
- The reforms include:
- Making the use of UCTs unlawful and giving courts the power to impose civil penalties
- Introducing more flexible remedies (including enabling courts to determine appropriate remedies when they declare a contract term to be unfair, instead of the term being automatically void)
- Expanding the definition of “small business contract”
- Introducing greater clarity on what constitutes a “standard form contract”
- Exempting from the UCT protections certain clauses that include “minimum standards” or other industry-specific requirements.
- It is not yet known when these reforms will commence. The next step will be the release of draft legislation for stakeholder comment.
What we cover in this article
This article provides a recap of the UCT regime under the ACL, then discusses the upcoming reforms to the regime, and concludes by discussing the recent enforcement action taken by the ACCC against Fuji Xerox.
Please click here to read the full update.