WHAT IS UNFAIR CONTRACT TERMS IN ACL?

 

Unfair contract terms in ACL are the rules and regulations that protect the consumer terms in areas where they have no opportunity to negotiate with the business.  This contract in Australia is entered by the consumers or by the small businesses who normally employ less than twenty people.  These small businesses may include advertising, courier services, the supply of raw materials, telecommunications and waste management and cleaning services.  The court can decide the term of standard form contract is void if the court considers that the term is unfair.  The standard form contract is prepared by one party of the contract.  This type of contract is not subject to negotiation between the parties and the party which has not prepared the contract has no real bargaining power. Gyms, telecommunications, motor vehicles, utilities, domestic building, travel and private education are examples of contracts for consumer transactions covered by the provisions. The insurance contracts that are covered by the insurance contracts act 1984 are not covered by the named provisions.  The private health contracts and the state and commonwealth government insurance contracts are subject to unfair contract terms provisions since they are not covered by insurance contract act 1984.  Court declares a term unfair if the term in such a contract will result in the significant imbalance in the parties, not reasonably necessary and if the term would cause detriment to a party.  A term that permits one party to terminate the contract, the term that permits one party to limit performance and the term that penalizes one party for a breach of contract are examples of the unfair term. The term that defines the subject matter and that sets upfront price payable under the contract are examples of the terms which are excluded from the unfair terms provisions. Only the court has the power to determine whether the term is unfair.

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