Legal Insight Issue 23

25 Nov 2015


Unfair Contract Term Protections

The Australian Consumer Law ("ACL") operates to protect consumers against terms in standard form contracts which are unfair. Amendments to the ACL which take effect in November 2016 will extend these protections to small businesses.

Broadly, a small business will be covered by the new protections if it employs less than 20 people and the price of the contract is $300,000.00 or less (for a 12 months or shorter contract) or $1 million or less (for a contract over 12 months). 

Certain types of contracts and contract terms are exempt.

When is a contract term unfair?

There are a number of factors to consider in determining whether a term is potentially unfair. The fairness of a term is considered in the context of the contract as a whole and is ultimately decided by a court.

The Australian Competition and Consumer Commission has suggested the following questions be asked to assist in determining whether a term is potentially unfair term.

  • Does the term cause a significant imbalance between your rights and obligations and those of the business?
  • Is the term reasonably necessary to protect the legitimate interests of the business?
  • Would the term cause you detriment (financial or non-financial) if the business tried to enforce it?
  • How transparent is the term?

The Federal Government acknowledges the significance of this change and this is why the operation of the new law has been deferred until November 2016 to allow businesses to implement any necessary changes to standard form contracts. 

Business, big or small, should not to ignore this change.  Remember, the effect of the legislation is that an "unfair term" is void… that's right, unenforceable and of no effect, as if it was never written in the agreement.  Any business which issues standard form contracts to a consumer or small business containing harsh or one-sided contractual terms, should take steps to review, and, where appropriate, amend its contracts before November 2016.

Need Assistance?

Hugh & Associates – Lawyers can offer competitive pricing for review and amendment of standard form contracts.

Enquiries should be directed to or by telephone to Robert Hugh on +61 2 9299 8220

Legal Insight Issue 22

31 Jul 2015

And just when you thought you were getting a handle on the PPSA


The Personal Property Securities Act, 2009 (Cth) ("Act") came into effect in January 2012.  Yes, over 3 years ago.  In its wisdom (we mean that seriously), the Government buil...

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Legal Insight Issue 21

07 May 2015

Franchise Agreements declared void! Will yours stand up?

Justice Murphy of the Federal Court of Australia delivered a recent judgment in the matter of ACCC –v- South East Melbourne Cleaning (in Liquidation) [2015] FCA 25 which found that a franchisor ("Coverall"):...

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Legal Insight Issue 20

06 May 2015

Online Dispute Resolution/Cyber Settlement/Cyber Mediation

Traditional Resolution of Disputes

Many of our readers or their clients are, unfortunately, from time to time involved in commercial or other civil disputes.  Whether such disputes involve small or large amounts ...

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Legal Insight Issue 19

20 Jan 2015

PPSA Update - Tardy Registration has Fatal Effects

In The Creditor (Trustee) -v- Australian Gaming and Entertainment Ltd (In Liq) [2014] FCA 1034, Pozzebon ("Creditor") argued that its security interest did not vest in the company in liquidation ("Grantor") under the Corporations Act...

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Legal Insight Issue 18

18 Jun 2014


Misleading Conduct in Advertising

Product Safety Guide for Online Businesses

Proposed Changes to Franchising in Australia

The Importance of Registering on the PPSR

Failure to register security interests has drastic effects!


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Legal Insight Issue 17

17 Feb 2014


Discretion of the SMSF Trustee

Commencement of NSW Motor Dealers' Unfair Contracts Regime

PPSA Developments

Voting Rights at Creditors' Meetings

Are you Ready for Privacy Law Changes?

Covert Recordings – ...

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Legal Insight Issue 16

16 Nov 2013


PPSA Update - A Security Interest By Any Other Name

Federal Court Allows Liquidator's Sale

ACCC Enforcement - Recent Examples

Take-Away Food and Fitness Industries - Franchising Audits Coming Your Way

Trusts - Shams - Bankruptcy


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Legal Insight Issue 15

05 Sep 2013


Amendments to the Insurance Contracts Act Pass the Senate

Former Trustee in Liquidation Entitled to Sell Trust Assets

The ACCC – A Toothy Tiger

Possession is 9/10ths of the Law!

Federal Court Orders – "Unfair Terms"

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Legal Insight Issue 14

11 Jul 2013


Enforceability of Contractual Dispute Resolution Provisions

ACCC Takes Action Alleging "Unfair Terms"

Negotiated Penalty Arrangements with ASIC/ACCC for Civil Penalty Infringements of Corporations Act, 2001/Competition and Consumer Act, 2010

Update on Franchising ...

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Legal Insight Issue 13

08 Mar 2013


Federal Court decision regarding Franchising & Competition and Consumer Act

ACCC issues small business, franchising and industry codes six monthly report

Proposed new tribunal for New South Wales

2013 review of the Franchising Code of Conduct


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Legal Insight Issue 12

11 Dec 2012


Retailing- Take care when advertising "sales"

Powers of Attorney- Conditions or Limitations on the Power must be strictly followed.

Court removes liquidator due to impartiality concerns

Franchising update

Be careful with your prediction...

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Legal Insight Issue 11

22 Jun 2012


Severe Impact of Non-Compliance with "Genuine Steps Statement" Requirements

Australia Wide Business Name Register

Defects in the Personal Property Securities Act Register

Public Examinations – Examinees Granted Access to Affidavit in Support of Examination S...

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Legal Insight Issue 10

30 Mar 2012


Former Employee Ordered to Pay Damages to Former Employer for Poaching Clients

ACCC 2012 Objectives and Updated Compliance and Enforcement Policy

ACCC's action regarding "unfair terms" in contracts

Amendments to the Home Building Act


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Legal Insight Issue 9

19 Dec 2011


Large Australian Retailer Fined $1.25 Million For Trade Practices Act/Australian Consumer Law Breaches

ACCC – The Tiger Showing Its Teeth

A High Court Decision Confirms That Extreme Care Is Required When Drafting Documents

See Red And Stop before Making Green Claims...

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Legal Insight Issue 8

21 Nov 2011


Pre-Litigation "Reasonable Steps" Delayed Further in NSW

Franchisors Beware

Proceedings Against Liquidators Personally

Liquidator Successfully Seeks Assistance of English Court to Enforce Judgments

Trustee's Right of Indemnity Hard ...

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Legal Insight Issue 7

04 Jul 2011


Pre-Litigation Requirements: Transitional Period

New Federal Court Rules

Insolvency Practitioners: Beware Making Representations on Fees

Employees and the Duty of Fidelity


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Legal Insight Issue 6

04 Apr 2011


Liquidator to Pay Costs on an Indemnity Basis Personally

Misleading and Deceptive Conduct – "Reasonable Consumer" Test Confirmed

Amendments to the Building and Construction Industry Security of Payment Act ("ACT")

Steps you Must Take Before Commenc...

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Legal Insight Issue 5

08 Nov 2010


Expert Determination Clause Binding on Parties

Examination Transcripts Cannot be used Against Others

Building Industry - Payment Claims - Setting Aside an Adjudicator's Determination

Clarification by High Court as to what Constitutes an Appealable Error of Law

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Legal Insight Issue 4

04 Oct 2010


ADR - A Prerequisite to Commencing all Federal Civil Litigation

Building and Construction Industry Payments Act - Adjudicator's Determination Set Aside

Unfair Contracts - It's Now Law!

Protect Your IP - New Free Government Service

New Sta...

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Legal Insight Issue 3

08 Mar 2010


Franchising Update

The Chocolates 4 U Case – not so sweet!

Legal Professional Privilege – Employees Waiving Your Privilege

Succession Law Update

Franchising Update

The Franchis...

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Legal Insight Issue 2

09 Nov 2009


"Unfair" Contracts Amendments to Trade Practices Act

Update on Alternative Dispute Resolution and Civil Litigation

Appointment of Voluntary Administrator Amounts to a "Change in Ultimate Control"

Personal Property Securities Law


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Legal Insight Issue 1

11 May 2009


Recent High Court of Australia Decision Awarding Damages to Landlord

Liquidators/Voluntary Administrators - Voting Rights of Proxy Holders


Recent High Court of Australia Decision Awarding Damages to Landlord


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