Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
Trade Practices Amendment (Australian Consumer Law) Bill 2009 Explanatory Notes to amendments to be moved by Senator Xenophon Sheet 5898 (1) and (6) TO INCLUDE BUSINESS TO BUSINESS CONTRACTS INVOLVING TRANSACTIONS LESS THAN $2 MILLION As per the original drafting of the Bill, this amendment provides for business-to-business contracts for $2 million or less to be subject to the unfair contract terms provisions of the legislation. Like consumers, small businesses are increasingly victims of unfair contract terms and should, like consumers, also have access to those provisions. This amendment will enable small businesses to be covered by the unfair contract terms provisions of the ACL. (2) and (7) TO DELETE REFERENCES TO "TRANSPARENCY" AND "DETRIMENT" Courts currently have the discretion to consider all aspects of cases before them, and should not be constrained to focus on 'transparency' and 'detriment' specifically when it comes to determining whether or not a contract term is unfair. The term "unfair" is expressly and separately defined and the subsequent specific references in the Bill to transparency and detriment are therefore unnecessary. The mandatory requirement for the Court to focus on transparency and detriment will require the court to address these specific questions and will effectively turn these mandatory requirements into tests in themselves and in a manner that negatively impacts on the consumer. This amendment removes references to these superfluous terms. (3), (4) and (8) TO INCLUDE A PROVISION FOR "SAFE HARBOURS" To give greater business certainty, provisions for 'safe harbours' should be implemented, whereby businesses and business associations can choose to approach the ACCC to seek approval or authorisation of particular contracts or contract terms. The ACCC would review the contract or contract term against a legislative set of criteria for granting the safe harbour and these approvals or authorisations would be an exemption to the unfair contract terms provisions of the legislation. Legislative criteria to be applied by the ACCC in granting an authorisation would include the following requirements: - that the contract term or terms reflect a reasonable balance between the rights and obligations of the parties to the contract; - where the contract term or terms relate to the imposition of a fee or charge for the provision of a service, that the fee or charge is reasonably proportional to the justifiable cost or costs of providing the service;Index] [Search] [Download] [Bill] [Help]- the contract term or terms are reasonably necessary to protect the legitimate interests of the larger party. Under this mechanism, the ACCC can authorise `model contracts' or 'model contract terms' and, as a result, facilitate the development of fairer contracts or contract terms which can apply to whole industries and contract groups. (5) TO DELETE THE EXEMPTION FOR INSURANCE CONTRACTS Under Section 15 of the Insurance Contracts Act, insurance contracts are excluded from the operation of any Act (Commonwealth, State or Territory) that provides relief in the form of judicial review of harsh or unfair contracts". However, to allow insurance contracts to remain exempt from this Bill would undermine its intent, which is to provide safeguards for consumers against unfair contract terms. This amendment deletes this exemption. Sheet 5891 (1) NO EXTRA FEES FOR PAYING IN CASH Under this amendment, businesses will be prohibited from charging customers additional fees for paying bills in person or by cash. This ensures that Australians who cannot or choose not to use the internet to pay their bills will not be penalised unfairly. (2) REQUIRED WRITTEN CONSENT FOR PERSONAL DETAILS GOING OFFSHORE This amendment will require banking institutions to obtain written, informed consent from customers before personal information can be transferred to a person outside Australia. Currently, data including credit card numbers, passport details, PINs, licence numbers, marital status, home address and employment details are and can be sent to an offshore location without a customers consent. (3) and (4) RECOVERY OF DAMAGES FOR NON-PARTY CONSUMERS This amendment provides that the court may order damages as it sees fit, including an award of damages.