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Unfair Contract Terms in a Business to Business Contract

Posted by on Dec 8, 2017 in Business Sale & Purchase News, Commercial Agreements & Disputes News, Conveyancing News, Leases News, Litigation News, News |

In a recent Federal Court case, Australian Competition and Consumer Commission v J J Richards & Sons Pty Ltd [2017] FCA 1224, the Federal Court found that a number of terms in a standard form contract between a large waste management company and a small business were unfair and therefore void. Under the Australian Consumer Law consumers and small businesses are protected from unfair contract terms imposed on them by standard form contracts. In this case the standard from contract included terms (later found to be void): * binding customers to a further term of the contract unless notice was given 30 days before the end of the term (automatic rollover); * allowing a unilateral increase in prices during the term; * requiring the waste management company to be the exclusive provider of services; * allowing a suspension of service if payment was outstanding for 7 days; and * preventing the customer from terminating the contract if payments were outstanding. The lesson both for businesses wanting customers to sign standard form contracts and for customers presented with a standard form contract by a supplier is to to carefully review the document to ensure that there are no unfair terms which will impact on the...

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New Laws For Ticket Scalping and Gift Cards

Posted by on Dec 8, 2017 in Litigation News, News |

New amendments to the Fair Trading Act 1987  targeting ticket scalping and gift cards will commence in NSW in 2018. The changes include: Ticket Scalping 1. A ticket to an event such as a concert or sporting fixture cannot be re-sold for more than the original price plus a maximum of another 10% for transaction costs. 2. The maximum penalty for contravention will be $22,000 for individuals and $110,000 for corporations. 3. Any advertisement for the re-sale of a ticket cannot specify a sale price more than 110% of the original price. 4. The use of software to enable persons to rapidly buy large numbers of tickets is banned. Gift cards 1. All gift cards must have an expiry date of no less than 3 years. 2. No charges or fees can be imposed by a retailer so as to reduce the redeemable value of the gift card....

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New Scheme for Removing Driver Disqualifications

Posted by on Nov 9, 2017 in Litigation News, News |

Under a new scheme in NSW introduced by the Road Transport Amendment (Driver Licence Disqualification) Act 2017, as from 28 October 2017, eligible drivers who have not committed any driving offence during a certain period of time (“offence free period’) may apply to the Local Court to remove an existing disqualification period imposed on them. Who Can Apply? All drivers are eligible to apply provided they have not been convicted of  a driving offence involving death or grievous bodily harm. Grounds to Apply Provided a driver has been free of driving offences for two years before the application to the Local Court and has served at least two years of his current disqualification period then the Court will consider lifting the disqualification. However, if the driver’s disqualification was as a result of a major offence including exceeding the speed limit by more than 30 km per hour or street racing then the offence free period required will be 4 years. What Will the Court Consider? * The safety of the public.   *The applicant’s overall driving record.  *The applicant’s need to travel and the availability of public transport.  *The applicant’s conduct since the disqualification commenced.  *The applicant’s health, finances and any other relevant circumstances. What if the Application is Successful? If the Local Court decided to lift the disqualification it will order on what date that comes into effect. The driver will need to reapply to Roads and Maritime Services for their licence and will need to successfully complete road safety and knowledge tests.    ...

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Changes to Retail Leases Act

Posted by on Jul 3, 2017 in Business Sale & Purchase News, Commercial Agreements & Disputes News, Conveyancing News, Leases News, Litigation News, News |

The Retail Leases Act 1994 applies to most retail shop leases in NSW. Amending legislation, which commenced on 1 July 2017, introduces significant reforms including the following changes: * The requirement that a retail lease must be for a minimum of 5 years has been removed so that there is now no minimum term. * A lessee will now have a right to compensation where the the lessee terminates the lease inside the first 6 months for a failure by the lessor to give the lessee a Lessor’s Disclosure Statement or if the lessor gives one that is incomplete, false or misleading. * A lessor must return a bank guarantee to a lessee within 2 months of the lessee complying with its obligations under the lease. * A retail lease must be registered within 3 months of the executed lease being returned to lessor by the lessee. * A lessee will not be liable to pay a particular outgoing under the lease unless that outgoing was disclosed in the Lessor’s Disclosure Statement. Also, if the lessor had no reasonable basis for a particular outgoing estimate the lessee is only obliged to pay the amount of the estimate and nothing more. * A Lessor’s Disclosure Statement, which has to be provided by the lessor to the lessee 7 days before the lease is entered into, can now be amended if the parties agree in writing rather than the lessor having to issue a new document and the parties having to wait another 7 days. * The monetary jurisdiction of the NSW Civil and Administrative Tribunal with regard to retail lease disputes is increased from $400,000.00 to $750,000.00. * Penalty notices for failure to comply with the Act can now be issued. The main message is that greater care must now be taken to ensure that a Lessor’s Disclosure Statement is accurate otherwise: (a) a lessee may not only be entitled to terminate the lease in the first 6 months but also substantial compensation including the cost of a fit-out and legal fees; and (b) a lessor may not be able to recover all outgoings in full if those referred to in the lease are not disclosed or the estimates are not reasonably based. Compliance with the Retail Leases Act will also be important to avoid receiving a penalty...

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New Unfair Contract Protections for Small Business

Posted by on Nov 23, 2015 in Business Sale & Purchase News, Commercial Agreements & Disputes News, Conveyancing News, Leases News, Litigation News, News |

The Federal Government recently passed legislation amending the Australian Consumer Law and the Australian Securities and Investment Commission Act so that it will extend protections to small businesses from unfair terms in standard form contracts with other parties as from 12 November 2016. A standard form contract is one pre-prepared by one party to the contract and where the other party is given no real opportunity to negotiate its terms. The protections will apply in favour of small businesses (i.e. one employing less than 20 people) where it is offered a standard form contract by another party for: * the supply of goods and services * the sale or granting of an interest in land (including a lease) * the supply of financial products and services In order to obtain the protections the upfront price payable under the contract must be no more than $300,000.00 or $1 million if the contract is for more than 12 months. Under the protections any unfair term in a standard form contract will be void and therefore not be binding on the small business. Examples of terms that may be unfair include: * terms that enable only one party to avoid or limit their obligations under the contract * terms that enable only one party to terminate the contract * terms that penalise only one party for breaching or terminating the contract * terms that enable only one party to vary the terms of the contract In order to determine whether a term is unfair an application would have to be made to an appropriate tribunal or court. However, just the threat of making such an application may resolve the dispute with the other party. It is important to note that the unfair contract protections apply to small businesses whether they are the acquirer of goods and services etc. or the supplier. This means that if a small business offers a standard form contract to another small business that other business can claim the unfair contract terms protections. All small businesses must now consider reviewing all standard form contracts with other parties due to commence, renew or be varied from 12 November 2016 to determine whether any of the terms are possibly unfair and need amendment so as to not to offend the new regime. November...

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New Laws for Off-The-Plan Purchases

Posted by on Nov 23, 2015 in Conveyancing News, Litigation News, News, Strata Matters & Disputes News |

A new amendment to the Conveyancing Act 1919 was passed by the NSW Parliament and applies from 2 November 2015 to the purchase of off-the-plan residential strata units or residential lots i.e. strata units or land lots awaiting creation following the finalisation of building works or sub-division. There have been concerns about developers using a “sunset clause” (a provision in a contract allowing the contract to be terminated if the strata or land lot is not created by the sunset date) to obtain a financial gain by deliberately delaying projects thereby entitling them to activate the clause and re-sell the property for a higher price. The purchaser would be left with nothing after incurring conveyancing costs. The new amendment provides that a vendor must give the purchaser at least 28 days written notice before rescinding a contract under a sunset clause. The notice must state the reasons for the proposed rescission and the delay. Even then the vendor can only rescind with the purchaser’s written consent or after obtaining an order from the Supreme Court of New South Wales. If the vendor is forced to apply to the Supreme Court it will take into account various factors such as: * the terms of the contract * whether the vendor has acted unreasonably or in bad faith * the reason for the delay * whether the subject lot has increased in value * the effect of the rescission on each purchaser * any other matter the Court considers relevant The vendor is also required to pay the purchaser’s costs of the proceedings unless the refusal to consent is considered unreasonable. If a developer determines that there is a substantial profit to be made by delaying a project and invoking a sunset clause to rescind a contract it can still make life difficult for a purchaser. One obvious tactic would be to offer a purchaser a financial incentive to consent to the rescission while at the same time warning the purchaser that it will claim in any application to the Supreme Court that the purchaser’s refusal to consent is unreasonable so that no legal costs will be recoverable. So, despite this commendable attempt at consumer protection the developer will still find a way to apply maximum pressure to purchasers. And many may well give in rather than face a long and costly legal battle. November...

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