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This newsletter concerns proposed changes to the law that will change the balance between the rights of a business to decide the terms on which it trades with its customers against the rights of consumers to protection.
The proposed changes were released by the Federal Government on 17 February 2009 in a consultation paper. The main changes proposed will outlaw many terms that businesses often put into contracts with consumers that are designed to protect the business. For example, the proposal is considering banning terms that:
1. allow a supplier to recover some goods from customers' premises if the customer has not paid for the goods;
2. limit a supplier's liability "to the extent permitted by law";
3. allow a supplier to retain or set off any amounts that are in dispute;
4. require alternative dispute resolution before a consumer can take action in court; and
5. allow a supplier to assign (sell) the contract without the consumer's consent.
This means that businesses may not be able to include these terms in their terms of trade if the proposals become law. The above list is only a sample. The proposed laws cover many more terms. A copy of the consultation paper can be found by clicking here.
Many businesses currently rely on these terms to protect themselves against the failure by consumers to pay for goods and against claims brought by consumers.
The Council of Australian Governments (that includes the Federal Government and each State Government) has agreed in principle to change Australian Consumer protection laws by enacting the proposed laws we refer to above. The changes will effect every business in Australia (including corporations, sole traders, partnerships, etc) and will be enacted by both State and Federal Governments.
Such a fundamental change in the terms on which businesses do business with consumers is, in our opinion, of fundamental importance to every business. If you believe that these changes will effect your business, you may wish to become involved and make submissions to the Government. Interested parties have until 17 March 2009 to make any submissions.
Australian Business Lawyers provide advice to small to medium sized businesses on ways that businesses can protect themselves. If you require any information or assistance with the terms on which you do business, please contact Tal Williams on (02) 9458 7241 or John Pagacs on (02) 9458 7006.
NOTE: This is for information purposes only.
It does not purport to be comprehensive or to render legal advice.
