In a previous edition of On Point (Treading a fine line in marketing – Will the fine print save you?), we discussed the legal pitfalls of suppliers seeking to rely upon disclaimers that are buried in fine print.
Now, a supplier has again been legally tripped up in seeking to rely upon an important term in a consumer contract that was in the fine print. The case involved Chrisco Hampers Australia Pty Ltd (Chrisco), which supplies Christmas hampers under a layby mail order scheme where purchasers sign up for monthly direct debits to pay for the hamper in advance.
The catch is that the direct debits don’t stop once the hamper is fully paid for. Instead, under the terms and conditions of the scheme, Chrisco continues the direct debits and automatically rolls the purchaser over into a new payment scheme for the following year’s Christmas hamper products unless the person specifically opts out.
The term in Chrisco’s terms and conditions that Chrisco relied upon to undertake this practice was challenged by the Australian Consumer and Competition Commission in the Federal Court of Australia, as an ‘unfair term’ under section 24 of the Australian Consumer Law.
One of the issues that is relevant to the question of whether a term is unfair is the extent to which the term is legible, presented clearly and readily available to any party affected by the term. If a term does not have those characteristics, then it is an indicator that the term is unfair.
In its recent judgment in the matter (Australian Competition and Consumer Commission v Chrisco Hampers Australia Limited  FCA 1204) the Federal Court found that Chrisco’s term was unfair and thus unenforceable by Chrisco. In coming to that view, the Court criticised the term because it was in a very small font size on a ‘densely packed page of small print terms and conditions’. The Court said that the term “could have been presented in a manner which was far more legible, much clearer, and more readily available to the consumer”. This was a significant factor in the Court’s conclusion that the term was unfair and should be struck out.
WHAT’S THE MESSAGE?
Despite the very common industry practice of using fine print in print and electronic media, a court has again found against a supplier because of its resort to fine print. The clear and continuing message from the courts is that suppliers to consumers face a substantial legal risk if they ever need to rely upon disclaimers or important terms or conditions contained in the fine print.