The ACCC gave fair warning to businesses and now it has demonstrated that businesses need to take its stance on unfair contracts terms seriously.

As we reported in the April 2013 Competition and Consumer News, following industry consultation in relation to problematic terms, the ACCC is now looking at taking enforcement action over unfair contract terms. The ACCC commenced proceedings in late April in the Melbourne Registry of the Federal Court against ByteCard (otherwise known as Netspeed Internet Communications), an internet service provider.

The ACCC alleges that ByteCard’s standard for consumer contract contains unfair terms as follows:

  • terms which enable ByteCard to unilaterally vary the price under an existing contract without providing the customer with a right to terminate
  • terms which 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
  • terms which enable ByteCard to unilaterally terminate the contract at any time with or without cause or reason.

The ACCC is seeking declarations that these terms are void. It has commenced the proceeds in the Fast Track List and the matter is listed for a scheduling conference on 13 June 2013.

The action is a timely warning to businesses to review their standard form contracts and take action to vary terms which may be considered unfair. Click here for our tips about this.