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TRADE
PRACTICES |
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December 2009 |
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Unfair
contract legislation delayed |
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In previous
newsletters we have described the proposed new national unfair contract laws.
These will render any 'unfair' term in a standard form consumer contract
void. This has substantial implications for a huge range of contracts,
from property developers' off the plan contracts, to software licences,
through to the standard terms and conditions used by any company that
supplies products direct to consumers. The Federal
Government previously stated that these laws would come into effect on
1 January. Partly as a result of the ETS wranglings, the relevant Bill
(the Trade Practices Amendments (Australian Consumer Law Bill) 2009)
was not passed by the Senate in its most recent sittings. Since
there are no more parliamentary sittings this year, the earliest the Bill can
now pass is February next year. The draft Bill
has now been amended to provide that the new unfair contract laws
will not come into effect until at least 1 July 2010. Other changes made to the draft Bill include the
following: §
A consumer will now not be able to
challenge an unfair term unless he or she can show that enforcement of the
term would cause them actual detriment. This detriment can be non-financial
(eg, mere irritation or distress to the consumer of any type may suffice), so
the change may not result in a significant narrowing of the effect of the new
laws. §
Contracts entered into prior to 1 July 2010
will be exempt from the new rules. If any term of that contract is varied
after 1 July 2010, only that provision becomes subject to the new rules.
Previously, if any provision of a contract was varied the whole contract
would become subject to the new unfair contract rules. Senator
Xenophon has proposed his own amendments to the Bill to apply the unfair
contract rules to business to business contracts and insurance contracts. The
likelihood of Senator Xenophon's proposals being adopted, however, seems
low. Other
Australian Consumer Law reforms The Federal
Government announced on Friday last week that the Ministerial Council on
Consumer Affairs (MCCA - a committee of State and Federal Consumer Affairs
Ministers) had agreed the substance of further Australian Consumer Law
reforms. As with the unfair contract rules, the new laws will be added as a
schedule to the Trade Practices Act which will then be adopted by
each of the States by the end of next year to apply as State law as well
as Federal. Significant
recommendations include the following: §
The system of implied consumer
warranties will be rewritten. The rewrite looks likely to be based on §
Product safety and recall laws will be
rewritten. Suppliers will have a legal obligation to report when they
become aware that a product has been associated with serious injury or death.
§
The various state laws on unsolicited
sales (eg, door to door sales and telephone sales) will be standardised.
For example, this will mean standardised rules on disclosures and whether or
not cooling off periods will apply to such sales. |
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If you have
any questions, please contact one of our partners named below. |
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Richard
Westmoreland |
Robert Gardini |
Peter van
Rompaey |
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(02) 9334 8717 |
(02) 9334 8619 |
(03) 8633 7506 |
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Steve Burns |
Simon Tolhurst |
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(02) 9334 8841 |
(07) 3002 6749 |
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hwlebsworth.com.au |
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