Conveyancing

What types of conduct may be considered unconscionable?

Published in: September 2017

When determining whether a person is in contravention of s 21, s 22(1) of the ACL outlines the types of conduct that may be considered unconscionable by the courts which includes the following:

“(1)  Without limiting the matters to which the court may have regard for the purpose of determining whether a person (the supplier ) has contravened section 21 in connection with the supply or possible supply of goods or services to a person (the customer ), the court may have regard to:

(a)  the relative strengths of the bargaining positions of the supplier and the customer; and

(b)  whether, as a result of conduct engaged in by the supplier, the customer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and

(c)  whether the customer was able to understand any documents relating to the supply or possible supply of the goods or services; and

(d)  whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the customer or a person acting on behalf of the customer by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services; and

(e)  the amount for which, and the circumstances under which, the customer could have acquired identical or equivalent goods or services from a person other than the supplier; and

(f)  the extent to which the supplier's conduct towards the customer was consistent with the supplier's conduct in similar transactions between the supplier and other like customers; and

(g)  the requirements of any applicable industry code; and

(h)  the requirements of any other industry code, if the customer acted on the reasonable belief that the supplier would comply with that code; and

 (i)  the extent to which the supplier unreasonably failed to disclose to the customer:

 (i)  any intended conduct of the supplier that might affect the interests of the customer; and

(ii)  any risks to the customer arising from the supplier's intended conduct (being risks that the supplier should have foreseen would not be apparent to the customer); and

(j)  if there is a contract between the supplier and the customer for the supply of the goods or services:

(i)  the extent to which the supplier was willing to negotiate the terms and conditions of the contract with the customer; and

(ii)  the terms and conditions of the contract; and

(iii)  the conduct of the supplier and the customer in complying with the terms and conditions of the contract; and

(iv)  any conduct that the supplier or the customer engaged in, in connection with their commercial relationship, after they entered into the contract; and

(k)  without limiting paragraph (j), whether the supplier has a contractual right to vary unilaterally a term or condition of a contract between the supplier and the customer for the supply of the goods or services; and

(l)  the extent to which the supplier and the customer acted in good faith.”

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