Posted by Elizabeth Gore-Jones
on 9 August 2023
We previously examined the types of contract which are not allowed to contain an unfair contract term.
If you enter into those kinds of contracts then you need to remove unfair contract terms to avoid penalties of around $50 million.
Some examples of unfair contract terms are as follows:
1. Allows one party to avoid or limit performance of the contract;
2. Allows one party, but not the other party to terminate the contract;
3. Penalises one party for breach but not the other party;
4. One party to change the terms of the contract but not the other party;
5. One party to renew or not to renew the contract but not the other party
6. One party to change the upfront price payable but not allowing the other party to terminate in those circumstances;
7. One party to unilaterally vary the characteristics of the goods or services to be supplied or the interest in land to be sold or granted under the contract
8. One party can unilateral determine in the contract has been breach or interpret its meaning
9. Limits one attire vicarious liability for its agents
10. Allows one party to assign the contract to the determinate of another party without that other parties consent
11. Limits one parties right to sue the other party
12. Limits the evidence one party can use in proceedings about the contract
13. Imposes an evidential burden on one party in proceedings relating to the contract
14. Any other term prescribed by regulation.
The court can determine that other terms are unfair in addition to the above.
In particular in relation to franchising, many of the above clauses routinely appear in franchise agreements and as a result franchise agreements need to be examined and changed for all new franchises granted on or after 9 November 2023.
This is not legal advice and you should see a lawyer for your own purposes.
We can assist you with contract advice and reviews.
