Hot on the heels of its recent report on the review of unfair contract terms, the Australian Competition and Consumer Commission (ACCC) has brought proceedings against ByteCard Pty Limited alleging a breach of the unfair contract terms provisions of the Consumer Law.

Following industry consultation in relation to problematic terms, the ACCC is now looking at taking enforcement action. The ACCC gave fair warning to businesses and has now demonstrated that they must take its stance on unfair contracts terms seriously.

The ACCC commenced proceedings in April 2013 in the Melbourne Registry of the Federal Court against internet service provider ByteCard (otherwise known as Netspeed Internet Communications). The ACCC alleges that ByteCard's standard for consumer contract contains unfair terms, including terms which:

  • enable ByteCard to vary unilaterally the price under an existing contract without providing the customer with a right to terminate;
  • require the customer to indemnify ByteCard in any circumstance, even where the contract has not been breached and the liability, loss or damage may have been caused by ByteCard's breach of contract; and
  • enable ByteCard to terminate unilaterally the contract at any time with or without cause or reason.

The ACCC is seeking declarations that these terms are void and has commenced proceedings in the Fast Track List. The action is a timely warning to businesses to review their standard form contracts and take action to vary terms that may be considered unfair.

For further information on this topic please contact Anne Freeman at Piper Alderman by telephone (+61 2 9253 9999), fax (+61 2 9253 9900) or email (afreeman@piperalderman.com.au).

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.