Unfair contract terms

September 03 2014

New rules regarding ‘unfair contract terms’ will come into effect on 17 March 2015. The rules will apply to ‘standard form consumer contracts’ – that is contracts between a supplier and a consumer (a person who acquires personal, domestic or household goods or services) that haven’t been negotiated between the parties such as standard terms of trade (usually written in 6 point font on the back of invoices).

Under the new rules, a term will be unfair when it:

  • Would cause significant imbalance in the parties’ rights and obligations,
  • Is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term, and
  • Would cause detriment to a party if it were applied.

If you’re a supplier, you should start reviewing your standard form consumer contracts now to ensure they don’t include any unfair terms by the time the new rules come into effect next year.

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