Ezidebit supports any initiative that allows our clients to conduct their businesses with greater clarity, certainty and expediency. That is why we support the passage of the Trade Practice Amendment through the federal parliament. The Amendment is now awaiting Royal Assent, and this will come into effect in the second half of this year.
What it means for Business?
The Amendment relates to consumer protection legislation and will introduce a new regime, voiding “unfair” terms of particular contracts for sale of goods and services to consumers.
The Amendment introduces new penalties for corporations and individuals who breach the Trade Practices Act.
A term of a consumer contract will be unfair if:
- It would cause a significant imbalance in the parties' rights and obligations arising under the contract; and
- It is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term.
The following are some of the examples of the kinds of terms that may be considered unfair:
- A term that permits the business (but not the consumer) to avoid or limit performance of the contract;
- A term that permits the business (but not the consumer) to terminate the contract;
- A term that penalises the consumer (but not the business) for a breach or termination of the contract;
- A term that permits the business (but not the consumer) to vary the terms of the contract;
- A term that permits the business (but not the consumer) to renew or not renew the contract; and
- A term that permits the business to vary the upfront price payable under the contract without the right of the consumer to terminate the contract.
The reform of the consumer protection regime is important to businesses. You may want to review your agreement in light of the Amendment and if unsure you may need to refer to your legal representative.