Unfair Contracts: New Laws 12/11/16


Major changes to contract law will come into effect on 12 Nov 2016. These changes are meant to bring fairness back into contracts often negotiated with parties in a superior bargaining position.

Have you entered into a "Take It or Leave It" Contract?

A term may be deemed unfair if it:

1. Causes a significant imbalance in the parties' rights and obligations; 2. Is not reasonably necessary to protect the legitimate interests of the other party ; and 3. Causes detriment to the other party.

The ACCC says these terms may be unfair:

"1. Terms that enable one party (but not another) to avoid or limit their obligations under the contract.

2. Terms that enable one party (but not another) to terminate the contract.

3. Terms that penalise one party (but not another) for breaching or terminating the contract.

4. Terms that enable one party (but not another) to vary the terms of the contract.

Ultimately, only a court or tribunal (not the ACCC) can decide that a term is unfair.

Importantly, terms that set the upfront price payable under the contract are not covered by the law."

If the terms are unfair they will be void.

Sarinas Legal will be reviewing the legislation and providing a more detailed post in the future.

For more information please contact: Evan Sarinas of Sarinas Legal. This release is not intended as legal or financial advice and all liability is disclaimed for reliance on it

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