Every time you buy a product, book a holiday, top-up your phone credit or hire a tradesperson, you are entering into a legally binding agreement that comes with its own terms and conditions.
Sometimes you may have the chance to negotiate before you agree, however it is more common for consumers to be offered a ‘standard form contract’, which is the same as those offered to everyone else on a ‘take it or leave it’ basis.
If one of the terms seems unreasonable, then it’s worth knowing that the Australian Consumer Law protects consumers from standard form agreements that would result in a significant imbalance of rights between the business and consumer.
Just recently, the Supreme Court to stop using short-stay accommodation contracts containing contract terms that were weighted strongly in his favour and left the renters facing considerable detriment.
Some of the unfair terms included non-refundable deposits, rent and bonds if bookings were cancelled at any time; forfeiture of the bond and rent in advance if other people stayed in the accommodation; and credit card authority to deduct repair and cleaning costs in excess of the retained bond.
The Supreme Court effectively struck out those unfair clauses in the contracts and ordered him to pay costs of $5,000, plus $1,500 to one of his renters left out of pocket.
In the wake of this outcome, we’re urging holiday and short-stay accommodation providers to review their current contracts to ensure they are fair and balanced.
While a final decision on whether contract terms are unfair can only be reached by a court, the following questions may potentially help consumers to identify one:
- Does it cause a significant difference between your rights and obligations and those of the business?
- Is it really necessary to protect the interests of the business?
- Would it cause you a detriment (financial or non-financial) if the business tried to enforce it?
- How transparent is the term? Do you understand what it means and the impact on you if it was enforced?
