The Australian Consumer Law

The Trade Practices Act has now been replaced with the Competition and Consumer Act. The Competition and Consumer Act incorporates much of the Trade Practices Act provisions and also The Australian Consumer Law. Of interest to the conveyancing/property law industry are the unfair contract provisions contained in The Australian Consumer Law. Whilst these came in last year, they will most likely receive renewed attention in light of the new Act.

For a contract term to fall under the unfair contract provisions it must be part of a consumer contract. Consumer contracts include the sale or granting of land to an individual for personal use. This sounds like a normal sale or purchase in the residential property market. So we can tick the first box. Then it is a matter of whether the term is both unfair and part of a standard form contract. The question is this, is a contract for sale of land a standard form contract? Part 2-3 of the Australian Consumer Law lists some of the factors a court is to consider when deciding this question. These include factors such as bargaining power, opportunities for negotiation and whether the contract was tailored to the particular circumstances. A contract clause may be unfair if it significantly affects a party's rights, is not reasonably necessary and would cause detriment to a party.

It will be interesting to monitor the impact of The Australian Consumer Law on conveyancing contracts. It might have very little impact. I would suggest that it may affect contracts for off-the-plan purchases that tend to be of a very standard (and often one-sided) nature. However, practitioners would do well to at least consider the possibilities and perhaps remove that onerous clause or two that is not actually necessary for protecting the client's interests.