If passed, the Bill will create a ‘national unfair contract terms law’.
On 7 September 2009, the Senate Economics Legislation Committee recommended that the Bill be passed and there be no deferral of the starting date of 1 January 2010.
The Bill was passed on 20 October 2009 without amendment in the House of Representatives.
The Bill was introduced into the Senate on 26 October 2009 and is scheduled to be considered by the Senate in its sittings beginning on 16 November 2009.
Following discussions with the Opposition and relevant stakeholders, the government has proposed a number of amendments to the Bill to be debated in the Senate. The ‘Supplementary Explanatory Memorandum and Corrections to the Explanatory Memorandum’, which relates to these amendments, states that the amendments:
- provide that a term in a consumer contract can only be unfair if it would cause financial or non financial detriment to a party
- remove the consideration of whether a term would cause detriment, or a substantial likelihood thereof, from the considerations that a court must have regard to in determining whether a term of a consumer contract is unfair
- remove the power for the Minister to prohibit terms by regulation
- provide that the Minister must take into account certain factors in prescribing by regulation an example of an unfair term
- provide that the unfair contract terms provisions commence on 1 July 2010 or, if the Bill is passed on or after 1 January 2010, on a date that cannot be before 1 July 2010, and
- clarify that the unfair contract terms provisions apply to consumer contract terms varied on or after commencement as varied.
In addition to the government amendments, Senator Xenophon (Independent) has also proposed the following amendments (amongst others) to the Bill:
- adding to the definition of a ‘consumer contract’ a ‘small’ business-to-business category, where the upfront price of the goods or services under the contract is $2 million or less, and
- a ‘safe harbour’ regime where the ACCC could authorise model industry terms or contracts.
If any amendments are accepted by the Senate, the Bill will then be sent back to the House of Representatives for consideration and approval.
This article was written by David Cooper, Partner, Sydney and Alan Peckham, Partner, Melbourne.
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