09 Aug 2012
Unfair terms in on-line contracts
Are you an online seller? Do you use standard terms and conditions or enter into online contracts to sell your goods/services?
Under the Australian Consumer Law, unfair terms in standard form consumer contracts are void.The application of these new laws was recently considered in the context of online contracts.
Mr Malam signed up for a user account with the auction website, Graysonline, to purchase a glass-topped table. As we all do, Mr Malam accepted Grayonline’s standard terms by clicking the “I have read, understood and accept the terms and conditions” button without reading the terms. The terms were 13 pages long and excluded all liability for damage to goods purchased from Graysonline.
The Malams had a courier pick up the table. When it arrived, the glass was broken. Evidence showed that the table was broken when it was picked up by the courier. Graysonline sought to rely on its online contract to deny the Malams the right to return the table and get their money back.
The Tribunal held that Grayonline’s terms were long, confusing, not reasonably transparent, inconsistent in some parts, and importantly, went beyond what was reasonably necessary to protect Grayonline’s interests. So, the Malams got their money back.
How does this affect me?
If you haven’t reviewed your standard terms and conditions or standard form consumer contracts to make them as transparent and concise as possible and to remove any unfair terms, you could face the above scenario sooner or later.
What should I do?
Carefully review your standard form consumer contracts, especially your online contracts, to ensure that they are clear, concise and easy to read, especially those parts that seek to limit your liability or the rights of consumers that they may otherwise have against you.
In light of the size and importance of the transaction, keep the parts that you really need to protect your interests and remove those parts that you do not or that go beyond what is reasonably necessary to protect your interests. For example, a 30-page contract to sell fridge magnets is disproportionate to the transaction.
- Remember, in the world of online contracts, “less is more”.
This article was written by Senior Lawyer Jimmy Gill, M+K Intellectual Property Team.
To contact Jimmy, call (07) 3235 0460, or email email@example.com
You can also contact M+K in your state:
Queensland - (07) 3235 0400
Victoria - (03) 9794 2600
New South Wales - (02) 8298 9533
Tasmania - (03) 6210 0000