The prohibition on unfair contract terms in standard form consumer contracts is being extended. From 12 November 2016, it will also apply to standard form contracts with small businesses. Unfair contract terms are void and therefore cannot be relied upon.

From 12 November 2016, section 23 of the Australian Consumer Law (ACL) will read:

(1)     A term of a consumer contract or small business contract is void if:

  1. the term is unfair; and

  2. the contract is a standard form contract; and ...

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Bytecard Pty Ltd (NetSpeed) provided internet access services throughout Australia under standard form contracts that included a list of ‘Terms and Conditions’ (T&Cs).

In 2013, the Federal Court ruled that four of the T&Cs were unfair, and hence void under the ACL. By way of example, one of those terms purported to allow Netspeed to unilaterally vary the amount payable under its contracts without prior notice, in circumstances where consumers were not permitted to terminate to avoid the obligation to pay the varied amount. The clause stated:

NetSpeed reserves the right to change prices or services at any time without prior notice to customers or the public, except when the service is an Australian Broadband Guarantee Service. Price changes will not be retroactive for existing prepaid customers. It is the User’s responsibility to check this online.

To help determine whether you will have contracts at risk, the table below provides a summary definition of the key terms.

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