Unfair Consumer Contracts

Most of us don’t think twice about entering contracts. Every morning when you buy that coffee, hop on that bus, or maybe book an Uber driver to pick you up – you’re agreeing to a new contract. Contracts are simply legally enforceable agreements. Many are verbal, but they can be made in writing or even when you click ‘I agree’ on a website.

But what if a contract term is unfair? Under national and state law, consumers are protected from unfair trading practices, including unfair terms in standard form contracts. This doesn’t include contracts made between businesses but it does apply to all standard form consumer contracts. Unfair consumer contracts are simply not allowed.

So what is a standard form consumer contract? They’re those ‘take it or leave it’ agreements usually printed in long, boring, tiny print that most of us don’t even bother trying to read. You’re likely to sign a standard form contract when you buy a new phone plan, join the gym – or click ‘I agree’ to download that shiny new Uber app on your phone.

What makes a standard form term unfair then? If it would cause a significant imbalance in you and the other party’s rights and obligations, isn’t reasonably necessary to protect their interests, and would cause detriment (not just financial) to you if they relied on it – it’s unfair. If it ticks all of the above three boxes, the term will be void.

The term is also more likely to be unfair if it’s written in illegible or overly complicated language. Examples of unfair terms include terms that let the other party cancel or change the contract, or penalize you without giving you the same right.

If you think you’ve agreed to unfair terms in a standard form you can contact the relevant consumer protection agency such as the ACCC, or consult a lawyer. At the end of the day, you don’t have to abide by any unfair terms, though the rest of the contract will still be valid.

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