Sie sind auf Seite 1von 14

LAWS3173

Unfair Contracts
Unfair contract terms
Standard form consumer contracts Applies only to standard form consumer contracts: s 23(1)(b) o Rebuttable presumption that a contract is a standard form contract where consumer alleges it is: s 27(1) Definition of consumer: acquiring goods or services if the amount payable did not exceed $40,000, or were of a kind ordinarily acquire for personal, domestic, or household use or consumption, or they consisted of a vehicle or trailer acquired for use principally in the transport of goods on public roads: s 3: o Doesnt apply if goods were for the purpose of re-supply, or in the course of a process of production or manufacture, or in the course of repairing or treating other goods or fixtures on the land. Factors a court must consider to decide if it is a standard form contract: s 27(2) o Whether a party has all or most of the bargaining power o Whether the contract was prepared by a party without any discussion between the parties relating to the transaction o Whether a party was required to either accept or reject the terms of the contract as they were o Whether another party was given an opportunity to negotiate the terms of the contract o Whether the terms take into account the specific characteristics of another party or the transaction o i.e. generally of a take it or leave it basis: Schroeder Music Publishing Co Ltd v Macaulay [1974] Consumer Contract defined in s 23(3) as being: o A supply of goods or services, or o A sale or grant of an interest in land; to an individual whose acquisition of the goods, services or interest is wholly or predominantly for personal, domestic or household use or consumption

Test for unfairness: s 24(1) and s 12BG, ASIC Act 1. It would cause significant imbalance in the parties rights and obligation o Consumer must bring case, and onus on claimant to show that the term would cause a significant imbalance in the rights and obligations o Director General of Fair Trading v First National Bank [2001] Imbalance is a factual inquiry whether term is weighted in favour of the trader- any beneficial option or discretion or power, or the imposition of a disadvantageous burden or risk or duty An imbalance is significant if it detracts from the rights of consumers under the C/L or from the reasonable expedition of consumer as to the likely distraction of rights and obligations under the contract Price may be a relevant consideration a reduction in price may counterbalance an unbalanced term, etc.: Jetstar Airways Pty Ltd v Free [2008] The reasonable expectations of the parties may be a benchmark for significant imbalance: Director of Consumer Affairs Victoria v Trainstation Health Clubs Pty Ltd [2008] If it would surprise the consumer- they would not expect it, and would object to it if they knew. Director of Consumer Affairs v AAPT Ltd [2006] Look at fairness to determine if it causes imbalance- normative judgement contrary to the requirements of good faith: helps to determine whether there is a

o o

significant imbalance. Plays an adjectival role, NOT a separate substantive requirement Jetstar Airways Pty Ltd v Free [2008] Contrary to the requirements of good faith should not have an adjectival operationit has an independent operation as a separate element of that definition. There is some overlap with significant imbalance, but still separate. Held that significant imbalance was a quantitative judgement, not normative- must be sufficiently large to be important Also held that no implied term of good faith- and even if there was, it does not render unfair terms fair. Substantive effect: i.e. substance of the term, rather than merely its form. In Office of Fair Trading v MB Designs Lord Drummond Young looked at the practical effect Must consider the contract as a whole, and the impact of the term in the context of the term, not merely at specific rights and obligations which arent matched by the counterparty (see below)

o o

2. It is not reasonably necessary to protect the legitimate interest of a party o Burden is on the advantageous party to disprove: rebuttable presumption in favour of the consumer: s 24(4) o Acting in good faith does not necessarily prevent a party from having regard to its own legitimate interests: South Sydney District Rugby League Football Club Ltd v News Ltd; Garry Rogers Motors (Aust) Pty Ltd v Subaru (Aust) Pty Ltd o 2 step inquiry: Whether the term protects a legitimate interest (e.g. term protects the trader from business risks inherent in trade, and not for additional gain) meaning open to interpretation. Whether it is reasonably necessary to protect the interest (i.e. it must be a proportionate response. In Director of Consumer Affairs Victoria v Trainstation Health Clubs Pty Ltd [2008] a term was not unfair if it was necessary to provide a framework for the efficient and safe running of the club. However, another term for late payment was unfair as it was too broad for the merchant; it could be triggered by even a disproportionately minor breach by the consumer. Term was held unfair as it was too broad and one sided- proportionality of term is key: Director of Consumer Affairs v AAPT Ltd [2006] Market practice may be relevant to a decision: Jetstar Airways Pty Ltd v Free [2008]

3. If the term would cause detriment to a party if it were to be applied or relied on o Financial or otherwise- may include delay or distress o Does not require that the term has been applied or relied upon: sufficient if there would be detriment if the term were invoked o Generally aimed at clarifying that significant imbalance is aimed at the consumers rightsFocus on customer protection

Additional considerations In deciding on the unfairness, the court is to also consider: The extent to which the term is transparent: expressed in reasonably plain language, legible, presented clearly, and readily available to any party affected by the harm: s 24(2)(a); s 24(3) o Office of Fair Trading v Abbey National plc [2009] : Not only should the wording of conditions be comprehensible, but that consumers can understand how the term affects the rights and obligations that they and the merchant have under the contract. Consideration of the contract as a whole: s 24(2)(b) o Favourable terms to the consumer may not necessarily counterbalance an unfair term if the consumer is unaware of them- information imbalance favours the business: Director of Consumer Affairs Victoria v AAPT Ltd [2006]

Not every term is equally relevant- main requirement is to consider terms which might reasonably be seen as tending to counterbalance the term in question: Jetstar Airways Pty Ltd v Free [2008] No significant imbalance as Free had a benefit from the right to transfer ticket to another person. The imposition of charges of the parties rights and obligations should be taken in the context of the contract as a whole. Such matters the court considers relevant o May include measures complementing transparency and aimed at improving the information available to consumers, giving notice to customers, explanations given, if there were reasonable opportunities to consider information, etc. o Potentially may consider if special notice was needed for unusual terms- essentially, if there was unfair surprise: Thornton v Shoe Lane Parking [1971; Baltic Shipping (1991); Maxitherim Boilers Pty Ltd v Pacific Dunlop Ltd; Livingstone v Roskilly [1992]

Terms excluded from review: s 26(1) Terms that define the main subject matter of a contract o To ensure parties are not released from contract terms merely because they changed their mind about the good or service sought- genuine negotiation not lightly declared unfair: Director of Consumer Affairs Victoria v Craig Langley Pty Ltd & Matrix Pilates and Yoga Pty Ltd Terms that set the upfront price payable under the contract o Provided it was disclosed before the contract was entered into o Includes amount borrowed, interest payable, and disclosed fees from when contract was entered; it does not include contingent fees Terms required or permitted by a law o Example: s 68B of the TPA, which states a term for supply of recreational services is not be void because it excludes, restricts or modifies the warranties in s 74 of the TPA. Certain types of contracts: o Shipping contracts o Constitutions of companies, managed investment schemes or other bodies o Insurance contracts (s 15 of the Insurance Contracts Act)

Grey List: s 25(1) All terms generally allow for one party to the exclusion of the other (unilateral in nature) Term permitting one party to avoid or limit performance at their discretion and without liability (such as exclusion clauses) Term permitting one party to terminate the contract: Director of Consumer Affairs Victoria v AAPT Ltd broad potential application of the term meant it was unfair Term penalising one party for a breach or termination of the contract. o The sum must represent a reasonable pre-estimate of the losses to the seller resulting from breach: Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd; Ringrow Pty Ltd v BP Australia Pty Ltd Term permitting one party to vary the terms of the contract: Director of Consumer Affairs Victoria v Trainstation Health Clubs Pty Ltd the term was not specifically drawn to the consumers attention, and could operate in a way which the consumer may not expect, to their disadvantage Term permitting one party to renew or not to renew the contract Term permitting a party to vary the upfront price payable under the contract without the right of the other to terminate the contract Term permitting a party unilaterally to vary the characteristics of the goods/ services to be supplied, or the interest in land to be sold or granted: Director of Consumer Affairs Victoria v AAPT Ltd o If some understanding and consent by consumer, it may be considered fair Terms permitting a party to unilaterally determine whether contract has been breached, or to

interpret the contracts meaning A term limiting a partys vicarious liability for its agents A term permitting a party to assign the contract to the detriment of the other party without that partys consent: Director of Consumer Affairs Victoria v Backloads.com Pty Ltd A term limiting a partys right to sue another party A term limiting the evidence a party can adduce in proceedings relating to the contract A term imposing the evidential burden on one party in proceedings A term prescribed by regulations

Void terms: s 23(1) The effect of an unfair term is that it is void Contract continues to bind the parties if it is capable of operating without the term: s 23(2) Pre-emptive action in the form of a declaration of unfairness (therefore making it void) may occur: s 250(1) Injunctions may be ordered (Pt 5-2, Div 2) May also get compensation orders (Pt 5-2, Div 4) Compensation orders for non-parties (Pt 5-2, Div 4) Some argument that classical contract theory of freedom of contract may still cause courts to be cautious- and encourage a procedural approach to unfairness, i.e. looking to transparency and other steps to inform consumers about the terms of their contract to assess if a term is unfair: Kirby P in Biotechnology Australia Pty Ltd v Pace; Woolworths Ltd v Kelly; Baltic Shipping Co v Dillon

Unconscionability
A person must not in trade or commerce engage in unconscionable conduct: s 20 A person must also not engage in unconscionable conduct in connection with the supply of goods or services: s 21(1) In determining unconscionability, a Court may have regard to: s 21(2) o The relative strengths of the bargaining positions of the supplier and the customer; and o Whether, as a result of conduct engaged in by the supplier, the customer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and o Whether the customer was able to understand any documents relating to the supply or possible supply of the goods or services; and o Whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the customer or a person acting on behalf of the customer by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services; and o The amount for which, and the circumstances under which, the customer could have acquired identical or equivalent goods or services from a person other than the supplier; and o The extent to which the supplier's conduct towards the customer was consistent with the supplier's conduct in similar transactions between the supplier and other like customers; and o The requirements of any applicable industry code; and o The requirements of any other industry code, if the customer acted on the reasonable belief that the supplier would comply with that code; and o The extent to which the supplier unreasonably failed to disclose to the customer: Any intended conduct of the supplier that might affect the interests of the customer; and Any risks to the customer arising from the supplier's intended conduct (being risks that the supplier should have foreseen would not be apparent to the customer); and o If there is a contract between the supplier and the customer for the supply of the goods or services: the extent to which the supplier was willing to negotiate the terms and conditions of the contract with the customer; and the terms and conditions of the contract; and the conduct of the supplier and the customer in complying with the terms and conditions of the contract; and any conduct that the supplier or the customer engaged in, in connection with their commercial relationship, after they entered into the contract; and o Whether the supplier has a contractual right to vary unilaterally a term or condition of a contract between the supplier and the customer for the supply of the goods or services; and o The extent to which the supplier and the customer acted in good faith. Section 22 lists matters the court may have regard to for unconscionable conduct in business transactions. s 22(2) is to determine if the supplier has contravened the section supplying a business consumer; s 22(3) is to determine if acquirers contravened while acquiring goods or services from a small business supplier. Quite similar to s 21(2) [see p. 41 of materials for list]

Australian Competition and Consumer Commission v Lux Distributors Pty Ltd [2013] The ACCC commenced a proceeding against Lux in the Federal Court of Australia alleging that Lux had engaged in conduct in relation to the sale of vacuum cleaners to five elderly women in their homes that was, in all the circumstances, unconscionable. Relevantly, the alleged unconscionable conduct involved an employee of Lux using its existing customer database or other telephone directory to contact a householder ostensibly to offer a free maintenance check of their existing vacuum cleaner. The ACCC challenged whether the offer of a

maintenance check was genuine or was merely a ruse to get a foot in the door. Each of the five elderly women (aged in their 80s or 90s) agreed to have a Lux representative visit their home for the purpose of carrying out a free maintenance check. At each of the premises, the representative tested the customers existing vacuum cleaner and conducted a test which compared that vacuum cleaner with a near-new demonstration model. The representative used the results of the demonstration together with other selling techniques to convince the customer to replace their existing vacuum cleaner with the new Lux model. While moral fault or culpability may still be relevant to some notions of unconscionable conduct, the objective test is that the conduct was contrary to acceptable community standards to commercial dealings, "That normative standard is permeated with accepted and acceptable community values. In some contexts, such values are contestable. Here, however, they can be seen to be honesty and fairness in the dealing with consumers. Difference in bargaining power, failure to comply with the door-to-door selling requirements, and the use of deception were all relevant considerations. A statutory cooling off period which applies to a sale will not act to ameliorate unconscionable conduct in securing that sale.

Exclusion Clauses
There are 3 types of exclusion clauses: Excluding the rights which a party would otherwise possess under a contract (either by terms, or by rule of law) Restricting the rights of a party, without excluding the liability of the other Qualifying rights by subjecting them to specified procedures All 3 types are subject to the same principles o Darlington Futures Ltd v Delco Australia Pty Ltd o May also apply to analogous terms similar to exclusion clauses Canada SS Lines Ltd v The King [1952] AC 192 [indemnity provisions]; J Lauritzen AS v Wijsmuller BV [1990] 1 Lloyds Rep 1 (The Super Servant Two) [cancellation clauses] However, it must operate to benefit one party only

Suisse Atlantique Socit dArmement Maritime SA v NV Rotterdamsche Kolen Centrale [1967] 1 AC 361 Term was not deemed exclusionary as it operated for the benefit of both parties Function of exclusion clauses o To provide defences to possible actions for breach of contract: Owners of SS Istros v F W Dahlstroem & Co [1931] o Implies that exclusion clauses are applied after liability has been established, and that, even if it excludes all liability, there is still a breach of contract on the part of the promisor o To define contractual duties and obligations: Photo Production Ltd v Securicor Transport Ltd [1980] AC 827 The application of exclusion clauses depends on the parties intentions- therefore a question of construction: Sydney Corp v West; Darlington Futures Ltd v Delco Australia Pty Ltd Because of the statutory protection of parties in weaker bargaining positions, courts have taken a more balanced approach to exclusion clauses, treating it as another type of contractual provision: Darlington Futures Ltd v Delco Australia Pty Ltd General secondary rules: o Construction contra proferentem: exclusion clause ordinarily construed strictly against the party who drafted and is relying on the clause: Thomas National Transport (Melbourne) Pty Ltd v May & Baker (Australia); Wallis v Pratt o Darlington Futures Ltd v Delco Australia: Suggests you must construe the clause in accordance with ordinary construction principles, and only use this if ambiguity is found. The rule will equally apply to clauses which merely limit liability o Seriousness of breach: the more serious the breach, the less likely an exclusion clause would have been intended to apply: Robert A Munro & Co Ltd v Meyer; McRae v Commonwealth Disposals Commission The presumption that parties do not intend to qualify a right or remedy available in law follows- clear words would be necessary to show otherwise HIH Casualty and General Insurance Ltd v Chase Manhattan Bank ; Dairy Containers Ltd v Tasman Orient Line CV Exclusion clause will be construed to not apply in a situation created by a fundamental breach Suisse Atlantique Socit dArmement Maritime SA v NV Rotterdamsche Kolen Centrale, approving UGS Finance Ltd v National Mortgage Bank of Greece and National Bank of Greece SA o However, the rule is NOT that exclusion clauses never apply to fundamental breach Sydney Corp v West o Fundamental breach is a breach which provides the right to terminate the performance of the contract o Exclusion clause will not apply for breach of a fundamental term? Smeaton Hanscomb & Co Ltd v Sassoon I Setty Son & Co (No 1)

A fundamental term is one which is narrower than a condition

o o

o o

o o

Hain SS Co Ltd v Tate and Lyle Ltd However, the House of Lords in Suisse Atlantique stated exclusion clauses may still apply to fundamental terms- breach of a fundamental term is clearly a fundamental breach Exclusion clause will be construed as not applying to wilful breaches unless it expressly excludes liability Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd [1959] AC 576 Kamil Export (Aust) Pty Ltd v NPL (Australia) Pty Ltd (1993) 1 VR 538 Rule of construction, rather than a rule of law Total breach may also be read against exclusion clauses W & S Pollock & co v Macrae (HL) Often treated similarly to fundamental breach: Farnworth Finance Facilities Ltd v Attryde [1970] 1 WLR 1053 Also a rule of construction rather than rule of law Ailsa Craig Fishing Co Ltd v Malvern Fishing Co Ltd Exclusion clause does not apply to supply of an article different from what is contracted for UGS Finance Ltd v National Mortgage Bank of Greece and National Bank of Greece Contract for sale of land is entered into and contains an errors or misdescriptions clause in a material and substantial point, so far affecting the subject-matter of the contract that it may be reasonably supposed the purchaser might never have entered into the contract at all, the purchaser may be considered as not having purchased the thing which was really the subject of the sale, and is not bound to resort to the clause of compensation Flight v Booth Applied unless the parties have in the clearest words excluded its operation Torr v Harpur; Jennings v Zilahi-Kiss Main purpose rule: rejection of provisions which are inconsistent with the main purpose of the contract Glynn v Margetson & Co May be applied restrictively to clauses which would deprive the parties agreement of the legal characteristics of a contract Photo Production Ltd v Securicor Transport Ltd HCA held exclusion clause may apply to an event defeating the main object of the contract though Nissho Iwai Australia Ltd v Malaysian International Shipping Corp Berhad Carrier of goods by sea who deviates from the agreed voyage loses the benefit of the exclusion clause Hain SS Co Ltd v Tate and Lyle Ltd Also applies to contracts of carriages by land or rail London and North Western Railway Co v Neilson ; Thomas National Transport (Melbourne) Pty Ltd v May & Baker (Australia) Pty Ltd Possibly applicable to all bailment contracts? Davies v Collins [1945] 1 All ER 247 Contractor who breaches contract by stepping outside of the four corners of the contract will lose the protection of the exclusion clause Sydney Corp v West; Darlington Futures v Delco Australia. Exclusion clause to exclude liability for negligence must be clearly expressed Express reference to negligence, or a synonym, sufficient J Spurling Ltd v Bradshaw Smith v South Wales Switchgear Co Ltd Where no express reference, must decide if an intention to exclude liability should be imputed on the basis of the words used. Likely to be inferred where negligence is the only basis for liability Alderslade v Hendon Laundry Ltd Davis v Pearce Parking Station Pty Ltd The Canada SS rule- see p. 403 (similar to negligence rule above). Exclusion clauses must be reasonable Gillespie Bros & Co v Roy Bowles Transport Unreasonable if it would be unconscionable to allow the defendant to rely on it. However, court must discover the actual intentions of the contract, not

produce its own result; this is only to be used where two or more equally valid interpretations Photo Production Ltd v Securicor Transport Ltd Reasonableness always relevant Party cannot rely on exclusion clause to escape fraudulent misrepresentation Jennings v Zilahi-Kiss Oral representation may preclude reliance on an inconsistent exclusion clause Mendelssohn v Normand Ltd Exclusion clauses do not protect third parties to the contract due to privity of contract rule Third party may prove existence of a promise under which the protection of the exclusion clause is extended beyond the contract Shenker & Co (Aust) v Maplas Equipment and Services Termination does not prevent reliance on a clause

Good Faith
3 propositions of good faith: o In most contracts, a requirement of good faith must be implied, at least in connection with termination pursuant to an express term of the contract o Source of the implied requirement of good faith is an implied term o Good faith is satisfied by a party who has acted honestly, and reasonably o Renard Constructions (ME) v Minister for Public Works 7 illustrations of where good faith may be seen in contract law o Where offer is not supported by consideration, there are no contractual obligations- the law is concerned to ensure offeror acts in good faith. o Prevention of withdrawal from negotiations on a ground not related to the agreed event by interpreting condition precedents as qualifying parties performance obligations, not the existence of a contract o Implications and incorporation of terms: doctrine of implied terms suggests the existence of good faith as a doctrine Good faith also as an appropriate test for giving reasonable notice: Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd o Law of interpretation is concerned to ensure good faith o Law on vitiating factors, eg misrepresentation and unconscionable conduct. Good faith requires a party to act honestly, but it is short of requiring a party to volunteer information for the others benefit o Frustration- good faith requires that parties respect the bargain struck, and neither can call upon the other to perform in circumstances which are radically different from those contemplated during the bargain o Limitation on damages recovery from Hadley v Baxendale demonstrates good faith Parties who wish to recover in respect to an unusual loss must have communicated the risk prior to entry into the contract- good faith implies that party should be given to decline the contract on that basis. Good faith interpretation into contracts- court will not interpret a term which may create an unreasonable power. No need to imply a term o Carr v J A Berriman Pty Ltd o Renard Constructions (ME) v Minister for Public Works o Alcatel Australia Ltd v Scarcella

ACCC review of unfair contracts


Upon a finding of unfairness, the court may make orders including to vary the contracts or arrangements; a n order refusing to enforce any or all of the terms of the contract; or an order directing the person to refund money or property to the injured person. Findings of ACCC: unfair terms in contracts which: o Allow businesses to change contracts without consent This is an example also contained in the ACL ss 25(1)(d), (f) and (g) o Cause confusion about agency arrangements, and seek to absolve the agent from any liability o Unfairly restrict consumers right to terminate Example under ACL s 25(1)(b). Penalties for termination may also be unfair: s 25(1) (c) o Suspend or terminate services provided to the consumer Limiting performance is an example under the ACL: s 25(1)(a). Also, where party can decide whether contract has been breached without the right to respond by the other may be unfair: s 25(1)(h) o Make the consumer liable for things ordinarily outside their control o Prevent customers from relying on representations made by the business o Seek to limit consumer guarantee rights o Remove consumer rights to a credit card chargeback facility, even if consumer did not receive goods Other consumer concerns o Terms which allow businesses to use customers personal details for reasons not strictly limited to services o Terms which seek to limit jurisdiction and grant irrevocable, perpetual and royalty free rights to use UK Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR) o Wide scope- applies to all contracts At first, just applied to standard form contracts o Consumer regime Unconscionability development more in Australia than UK.

Contracts Review Act 1980


Under this act, relief cannot be granted to: s 6 o Crown, local authorities, or corporations o Persons if the contract was in the course of their trade, business or profession, except for a farming undertaking wholly or principally in NSW Court may give relief if it finds a contract or a provision in a contract is unjust in the circumstances relating to the contract at the time it was made: s 7 o May refuse to enforce any or all of the provisions o Declare the contract void o Vary the whole or part of the contract o For land instruments, make an order requiring the execution of an instrument that varies its provisions, or terminates or otherwise affects its operation In finding the contract or provision is unjust, court shall have regard to the public interest and to all the circumstances of the case, including the compliance or contravention of any or all of the provisions of the contract: s 9 Matters to have regard to include: o Material inequality in bargaining power o If the provisions were the subject of negotiation o If it was practicable for a party seeking relief to negotiate for the alteration or rejection of the provisions o If there are imposed conditions which are unreasonably difficult to comply with or not reasonably necessary for the protection of the legitimate interests of any party o If a party was not reasonably able to protect their interests o The relative economic circumstances, educational background and literacy of the parties o The physical form of the contract, and the intelligibility of its language o If independent legal or other expert advice was obtained by the party seeking to rely on this Act o The extent the provisions and their legal and practical effect were explained by any person, and whether they understood the provisions and their effect o If there was undue influence, unfair pressure or unfair tactics used o The conduct of the parties to proceedings of similar contracts o The commercial or other setting, purpose and effect of the contract Court is not to have regard to injustice from circumstances that were not reasonably foreseeable at the time the contract was made: s 9(4)

Unfair Contract Terms Case Law


Director Of Consumer Affairs v AAPT [2006] Justice Morris decided that there is no separate requirement of good faith in consumer contracts, but that good faith is relevant to determining whether a term in a contract causes an imbalance which is significant between the parties. Justice Morris also noted that good faith had procedural and substantive aspects, and that in some cases a term in a consumer contract may cause such an imbalance that the term is unfair, even if it is individually negotiated or has been brought to the notice of the consumer. Several terms in the standard AAPT contract were found to be unfair and void, as they gave AAPT unilateral and wide-reaching powers to terminate or vary the contract, which, taking into consideration the principles of good faith, caused significant imbalance between the parties. For example, a clause allowing AAPT to vary the contract at any time was unfair because it permits AAPT to vary any term of the agreement, at any time, for any cause.

Director of Consumer Affairs Victoria v Matrix Pilates and Yoga Pty Ltd [2008] Judge Harbison attempted to provide 'signposts' as to the type of terms that will be regarded as unfair, so as to provide certainty to traders when formulating contracts. The terms that Judge Harbison found to be unfair included: that gym membership was non-refundable and non-cancellable. This term was unfair as it did not allow the customer to cancel the contract, even if the gym was in breach of the contract; a term which allowed the gym to deduct funds from member's bank accounts if they failed to make payments by due dates. This term was unfair as it enabled the gym to deduct payments even where there was a legitimate dispute between the parties, and it gave the gym the unilateral right to determine what amount could be deducted; a term which entitled the gym to continue to receive monthly payments even after the expiry of the contract term, unless 30 days notice was given by the customer. This term was unfair as it converted a fixed term contract into an indefinite contract; a term which released and indemnified the club from any negligence or breach of contract. This term was unfair as it falsely denied the existence of statutory rights under the Fair Trading Act; and a term that if the customer wished to cancel their membership due to medical reasons or relocation that a cancellation fee of 50 per cent of the outstanding balance was payable. This term was unfair as was not a genuine pre-estimate of the gym's loss from early cancellation and constituted a penalty.

Jetstar Airways Pty Ltd v Free [2008] In Free v Jetstar Airways Pty Ltd [2007], VCAT considered amongst other things the unfairness of a term in Jetstars fare terms and conditions which required a customer who wanted to transfer an existing ticket into her sisters name to pay the (substantial) difference between the fare applicable on the day that the change was made and the original fare. On appeal to the Supreme Court ( Jetstar Airways Pty Ltd v Free [2008] VSC 539) Jetstar succeeded on the following three grounds: The VCAT had erred in finding the charges caused a significant imbalance by ignoring the benefit to Ms Free of being able to transfer the ticket; The VCAT had erred by failing to assess the impact of the charges in the context of the contract as a whole; The VCAT had erred by failing to recognise that contrary to the requirements of good faith is a separate limb that must be established in order to find a term is unfair.

ACCC v ByteCard Pty Ltd [2013] ByteCard (better known as NetSpeed Internet Communications) is an internet service provider that provides internet connectivity, domain registration, hosting and web design. In April 2013, the ACCC instituted proceedings in the Federal Court against ByteCard alleging that a number of clauses in the ByteCard standard form consumer contracts were unfair. It was alleged that these terms: enable ByteCard to unilaterally vary the price under an existing contract without providing the customer with a right to terminate the contract; require the consumer to indemnify ByteCard in any circumstance, even where the contract has not been breached, and the liability, loss or damage may have been caused by ByteCards breach of the

contract; and enable ByteCard to unilaterally terminate the contract at any time with or without cause or reason.

The Federal Court declared, by consent, that the clauses concerned are unfair contract terms. The Federal Court found that these terms: created a significant imbalance in the parties rights and obligations; were not reasonably necessary to protect ByteCards legitimate interests; and if applied or relied upon by ByteCard, would cause detriment to a customer.

Das könnte Ihnen auch gefallen