General Protections

Contributed by Nick Seddon, originally amended by Cathy He and Jane Black (NT Law Handbook), as amended by Adam Thompson and Andrew Tan, Consumer Law Centre ACT and current to March 2022

Unconscionable conduct

The doctrine of unconscionability is an equitable doctrine based on the general law. This doctrine is incorporated into the ACL. Unconscionable conduct is conduct that goes against good conscience. This is a broad concept but in practice for this conduct to be established it requires a significant degree of moral culpability.

A court may have regard to some of the following (the complete list is found in s 22(1) ACL) for the purpose of determining whether unconscionable conduct has occurred:

• the relative strengths of the bargaining positions of the supplier and the customer; and
• 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
• whether the customer was able to understand any documents relating to the supply or possible supply of the goods or services; and
• 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
• 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;
• 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. [ACL s22]

An illustrative statement on unconscionability was provided by Kitto J of the High Court in Blomley v Ryan [1956] HCA 81; (1956) 99 CLR 362 at 415, where his Honour observed that unconscionability occurs:

A consumer who is the victim of unconscionable conduct can take legal action. This could include a claim for an injunction to stop the conduct, a court ruling that a contract is void or should be varied, or the payment of compensation.

Case studies

While in the middle of a prolonged bout of heavy drinking, a farmer agreed to sell his farm at 30% less than its true value. The sale contract was set-aside by the court (Blomley v Ryan [1956] HCA 81; (1956) 99 CLR 362).

The Amadios, an elderly couple, signed a guarantee with the bank on behalf of their son. They thought that their son's business was prosperous when in fact it was in financial difficulty. The bank enhanced the business's appearance of solvency by selectively honouring cheques that overdrew its account. The bank obtained security for a non-performing loan as a result of the guarantee. The guarantee was set aside as unconscionable because it was manifestly disadvantageous to the Amadios. The bank must have been aware of this and took no steps to ensure that the Amadios were properly advised about the transaction: Commonwealth Bank of Australia v Amadio [1983] HCA 14.

A company was found to have acted unconscionably when it used unfair tactics to obtain payment, such as creating a fake complaints handling body and a fake debt collection agency to manipulate and pressure debtors into paying alleged debts. The court also found the company acted unconscionably by using scare tactics and unfounded claims to deter debtors from non-payment, including that if proceedings were commenced, the court would order the debtor to pay a certain amount of compensation to the creditor for failing to pay on time and that any assets belonging to the debtor would be repossessed: ACCC v Excite Mobile Pty Ltd [2013] FCA 350.

Unfair contract terms

The ACL provides protections against unfair contract terms contained in consumer contracts. Section 23(1) of the ACL provides that a contract term is void if the term is unfair and the contract is a standard form contract. A standard form contract is contact provided by the supplier on a ‘take it or leave it’ basis where the consumer has no opportunity to negotiate the terms of the contract. For example, a consumer purchases a mobile telephone plan on a 2-year contract. Consumers would be aware the terms that come with such contract are non-negotiable.

A term of the contract term is unfair if:

• it would cause a significant imbalance in the parties’ rights and obligations arising under the contract; and
• it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and
• it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on (s 23(1) ACL).

In deciding whether a contract term is unfair under s 23(1), a court may consider such matters as it thinks relevant, but must take into account:

• the extent to which the term is transparent; and
• the contract as a whole (s 23(2) ACL).

The ACL provides some guidance on what may be an unfair contract term. The following are examples of the kinds of terms of a consumer contract that may be unfair:

• a term that permits, or has the effect of permitting, one party (but not another party) to avoid or limit performance of the contract;
• a term that permits, or has the effect of permitting, one party (but not another party) to terminate the contract;
• a term that penalises, or has the effect of penalising, one party (but not another party) for a breach or termination of the contract;
• a term that permits, or has the effect of permitting, one party (but not another party) to vary the terms of the contract;
• a term that permits, or has the effect of permitting, one party (but not another party) to renew or not renew the contract;
• a term that permits, or has the effect of permitting, one party to vary the upfront price payable under the contract without the right of another party to terminate the contract;
• a term that permits, or has the effect of permitting, one party unilaterally to vary the characteristics of the goods or services to be supplied, or the interest in land to be sold or granted, under the contract;
• a term that permits, or has the effect of permitting, one party unilaterally to determine whether the contract has been breached or to interpret its meaning;
• a term that limits, or has the effect of limiting, one party’s vicarious liability for its agents;
• a term that permits, or has the effect of permitting, one party to assign the contract to the detriment of another party without that other party’s consent;
• a term that limits, or has the effect of limiting, one party’s right to sue another party;
• a term that limits, or has the effect of limiting, the evidence one party can adduce in proceedings relating to the contract;
• a term that imposes, or has the effect of imposing, the evidential burden on one party in proceedings relating to the contract (s 25 ACL).

Case Notes

In Australian Competition and Consumer Commission v JJ Richards & Sons Pty Ltd [2017] FCA 1224 the court found the following contract terms unfair:

• binding customers to subsequent contracts unless they cancel the contract within 30 days before the end of the term;
• allowing JJ Richards to unilaterally increase its prices;
• removing any liability for JJ Richards where its performance is “prevented or hindered in any way”;
• allowing JJ Richards to charge customers for services not rendered for reasons that are beyond the customer’s control;
• granting JJ Richards exclusive rights to remove waste from a customer’s premises;
• allowing JJ Richards to suspend its service but continue to charge the customer if payment is not made after seven days;
• creating an unlimited indemnity in favour of JJ Richards; and
• preventing customers from terminating their contracts if they have payments outstanding and entitles JJ Richards to continue charging customers equipment rental after the termination of the contract.

In Australian Competition and Consumer Commission v CLA Trading Pty Ltd [2016] FCA 377 the court found that a contract term imposing unlimited liability on the customer in any case of breach, however trivial or unrelated to the loss suffered by Europcar, was an unfair contract term.

Only a court or tribunal can declare a contract term unfair and therefore void. Seek legal advice if you believe a there is an unfair contract term in your consumer contract.

Unfair practices

A range of unfair practices are prohibited by the ACL including:

• offering gifts and prizes: traders are not allowed to offer gifts, prizes or other free items to attract consumers without intending to provide them or provide them as offered (s 32 ACL);
• bait advertising: traders are not allowed to advertise goods or services if there are reasonable grounds for believing that they can't supply them at the price offered within a reasonable time, given the nature of the market and the nature of the advertisement (s 35 ACL);
• referral selling: businesses are not allowed to induce consumers to buy goods or services by offering them a rebate, commission or some other benefit in return for supplying the names of potential customers or help with the sale of goods to other consumers, if receipt of the benefit is contingent on an event occurring after the contact is made (s 49 ACL);
• failure to supply goods or services paid for: a trader is not to accept payment for any goods or services:

• they do not intend to supply;
• when they intend to supply goods or services different from those promised;
• when they know they can't supply goods within the time promised or within a reasonable time frame (s 36 ACL);
• Aside from the offence of failing to supply goods or services that have been paid for, the trader is in breach of contract and the consumer could claim damages for any loss, including the purchase price.

• harassment and coercion: a business must not use physical force, coercion or undue harassment towards a consumer in connection with the supply or payment for goods or services, or the sale, grant or payment for an interest in land (s 50 ACL);
• pyramid schemes: pyramid schemes make money by recruiting people rather than selling a legitimate product or service. It is illegal to participate in or induce another to participate in a pyramid scheme (s 44 ACL);
• unsolicited credit and debit cards: it is illegal for businesses to send credit or debit cards to consumers who have not requested them (s 39 ACL);
• unordered goods and services: unsolicited goods and services are those sent or supplied to a consumer without their request or authority. A consumer is not liable to pay for these products or for their loss or damage unless it was wilful. A consumer who does not wish to purchase the goods should notify the sender of the date and time they were received and where they can be collected. If the goods are not collected within one month, the goods can be kept free of charge (s 41-42 ACL).

Unsolicited consumer agreements

An unsolicited consumer agreement is made when:

• it results from negotiations by phone or at a location other than the supplier's place of business and
• a supplier, or their sales agent, approaches you uninvited; and
• the total value is more than $100 (or cannot be determined when the agreement is made).

For example, when a salesperson calls at your door to persuade you to sign-up to a vocational course, or you receive a phone call from someone trying to sell you a new mobile phone plan.

Unsolicited agreements can also arise where:

• you provide your contact details to a business for one purpose, for example a competition entry, and the supplier contacts you for a separate purpose - to sell another product or service to you; or
• you return a missed call from a supplier or respond to any unsuccessful attempt by them to contact you.

What a salesperson must do

A door-to-door salesperson or telemarketer makes an uninvited call on a person they must comply with certain requirements if they make a sale of over $100 (Part 3-2 ACL).

They must:

• disclose their purpose and identity, and inform the customer that they will leave on request (s 74 ACL);
• tell the customer about their right to cancel the sale within ten business days (the cooling off period) of the date of the sale. The cooling off period starts from the date of signing for face-to-face sales, and from the day after you receive the written agreement for telephone sales (s 76 ACL);
• provide the customer a written copy of the agreement. A face-to-face salesperson must immediately provide a copy of the signed written agreement to the customer. Agreements negotiated by telephone must be provided within 5 business days (or such longer period as has been agreed) (s 78 ACL);
• limit their activities to restricted contact times (unless a prior arrangement has been made with the consumer), namely Monday to Friday between 9am and 6pm (8pm for telemarketers) and Saturday between 9am and 5pm. With no contact on Sunday or a public holiday (s 73 ACL);
• leave the premises immediately at the consumer's request (s 75 ACL).

A consumer can cancel or rescind a contract for goods or services:

• without giving a reason and at any time during the 10 business day cooling off period; or
• within three or six months of the contract, if the supplier has failed to comply with certain requirements (see below).

If the product proves unsatisfactory during or beyond these periods, the consumer still has other remedies available.

What must be in the sales agreement?

Any unsolicited sales agreement must:

• include all terms of the agreement;
• include the total cost to you (including GST if applicable), or how this will be calculated if the total cost is unknown at the time of making the payment;
• include any postal or delivery charges you will have to pay;
• contain the sales agent's name and contact details;
• include the supplier's contact details (their physical business address, email and fax number) and Australian Business Number (ABN) or Australian Company Number (ACN);
• be signed by you and the sales agent;
• be clearly written or printed, although any changes may be hand written and signed
• contain information about your rights to cancel the agreement including a notice on the front page;
• come with a form of notice that you can use to cancel the agreement.

The front page of the sales agreement must include a prominent notice that tells you about your right to cancel the agreement during the 10 business day cooling off period.

What you can do if you don't want salespeople at your door

If you do not want salespeople at your door, you can put up a "Do not knock" sign on or near your front door. This represents a request to leave. Ignoring the sign is breach of the ACL and may also be a trespass.

You can print a sign off from the ACCC website or contact the ACT Office of Fair Trading which can provide you with stickers.

If you do not have a do not knock sign or similar sign (for example – “No unsolicited sales”), and a sales person comes to your door, you can tell them to leave. The salesperson must comply with your request and must not contact you again on behalf of the same supplier for 30 days.

What you can do if you don't want sales calls

In 2007 the Commonwealth Government set up the Do Not Call Register in response to concerns about increasing levels of unsolicited telemarketing calls and marketing faxes. People can list their Australian fixed line and mobile numbers on the Do Not Call Register, so long as those numbers are used mainly for private or domestic purposes. Telemarketers can check their calling lists against the Do Not Call Register. If a telemarketer calls a number on the Do Not Call Register, they may be in breach of the law and may face penalties. However, it may take up to 30 days before telemarketing agencies recognise new numbers on the register and stop calling you.

Also, registering your telephone number on the Do Not Call Register will not stop all telemarketing calls to your number. There are some exemptions that allow certain public interest organisations, like charities, religious organisations and registered political parties to continue to make telemarketing calls. Market researchers can also continue to make telemarketing calls.

The Australian Communications and Media Authority (ACMA) manages the register. Details about the register and how to add your telephone number to it can be found on ACMA's website at www.donotcall.gov.au or by phoning 1300 792 958.

Change-of-mind relating to an unsolicited sale

If, during the cooling-off period, you decide you do not want (for any reason) the product or service, you can cancel the agreement without penalty. This is regardless of whether you have signed the agreement or not.

The cooling-off period for unsolicited sales is 10 business days starting at the beginning of the first business day after the day on which the agreement was entered into.

The cooling off period is extended to three months if the sales agent:

• approached you outside the permitted hours;
• did not disclose the purpose of their visit or their identity;
• did not leave when you asked.

The cooling off period is extended to six months if the sales agent:

• did not tell you about the cooling-off period;
• did not give you a copy of the agreement;
• provided services within the cooling-off period or provided goods costing over $500.

For example, a sales agent approaches a consumer at their home offering a deal to install solar panels on the roof of their home and the consumer signs a contract. The sales agent visited the consumer during permitted hours and told them the purpose of their visit, but did not mention the 10 business days cooling off period. The consumer now has the right to terminate the agreement for an extended period of six months.

How to cancel an unsolicited consumer agreement

You can cancel an agreement verbally or in writing. If you cancel with a written notice, you can do so by emailing, faxing, posting or personally delivering the notice to the supplier. Cancellation of the agreement is effective from the date on which you provide the notice. The notice does not have to be in any specific form.

If you send your cancellation notice by post, it is taken to have been given to the supplier at the time you posted it. Keep a record of this date and, if possible, any proof of posting.

Receiving goods or services during the cooling off period

The supplier can supply goods to you during the cooling off period up to a total price of $500.

However, they cannot supply you with any services during the cooling off period - exception: electricity or gas services. During the cooling off period an energy supplier can provide electricity or gas to a household not already connected or where there is already a connection but no supply.

No payment during the cooling off period

A supplier cannot request or accept payment from you during the cooling-off period.

It is unlawful for the supplier to request or accept payment from you for 10 business days starting the first business day after the day you signed the agreement. However, this does not apply to the supply of electricity or gas. If you have cancelled the agreement and made any payment, the supplier must refund your money. You must return any goods that have not been used.

Returning goods after rights are exercised

If you cancel the agreement during the cooling off period, you must, within a reasonable time, do one of the following:

• return any goods to the supplier;
• notify the supplier where they may collect the goods. The goods become your property if the supplier does not collect them within 30 days of you cancelling the agreement.

You are not responsible for any damage or depreciation due to normal use of the goods or due to circumstances beyond your control.

Lay-by agreements

A lay-by agreement lets you buy a product and pay for it in by instalments before taking it home. It's important for you to understand what the written agreement covers and how you or the trader can cancel it.

What is a lay-by agreement?

An agreement is deemed to be a lay-by agreement if you do not receive the goods until fully paid for and:

• the agreement is called a 'lay-by' agreement and you pay for the goods in at least two instalments; or
• you pay for the goods in at least three instalments if the agreement is not specifically called a 'lay-by' agreement.

Any deposit you pay on a lay-by agreement is deemed an instalment.

The lay-by agreement must be in writing and a copy must be given to the consumer (s 96 ACL).

Cancellation of lay-by agreements

You can cancel the lay-by agreement at any time before you receive the goods. If you decide to cancel the agreement, the business must refund your deposit and all other amounts you have paid except for the termination fee (s 99 ACL).

Where your payments do not cover the termination fee, you will have to pay the difference.

Businesses can only cancel lay-by agreements if:

• you have broken the agreement, for example, you failed to pay instalments; or
• they are no longer trading; or
• the product is no longer available and this is outside of their control.

Pricing displays and receipts

Knowing how much something is going to cost, and how much you paid for it is important so that you can exercise your consumer rights.

Pricing displays

There are specific laws about how businesses have display how much something costs.

When prices are advertised or promoted, products and services must clearly display a single price which is the minimum total cost that is able to be calculated. This should include:

• the price of all aspects of the final product and service;
• all taxes, duties and extra fees.

It does not need to include:

• delivery charges - although the minimum delivery charge should be included separately in the advertisement;
• optional charges or extras.

The single price must be at least as prominent as any other price displayed. This means you should be able to identify the total price in the advertisement just as easily as the prices for all the other aspects. For example, the price of a holiday advertised should be inclusive of all costs, including any airport taxes and charges.

Restaurants, cafes and bistros that charge a surcharge on certain days do not need to provide you a separate menu or price list or have a separate price column with the surcharge included. However, the menu must include the words "a surcharge of [percentage] applies on [the specified day or days]" and these words must be displayed at least as prominently as the most prominent price on the menu.

Multiple pricing

Where different multiple prices appear for one product or service, businesses must withdraw those products and services and fix the display or advertisement. There are exceptions when the advertisement states that prices vary in different regions, where a price is entirely hidden by another price, a unit price is shown, or a price is displayed in an overseas currency.

If you choose an item or service that has multiple different prices displayed or advertised and the business cannot withdraw the product or service from sale and fix the error, you are entitled to buy it for the lowest price.

What are misleading prices?

Misleading prices may include:

• a 'before', 'was' or 'strike through' price that is not the price those items were sold for in a reasonable period immediately before the sale period started;
• a 'before', 'was' or 'strike through' price where only a limited proportion of sales were at the higher price in a reasonable period immediately before the sale period started;
• a comparison between cost/wholesale and sale prices if the cost/wholesale price is greater than what the business paid for the products;
• a price comparison with a competitor price for identical goods, but the stated price is taken from a different market or geographical location;
• savings or discount statements when compared to the recommended retail price (RRP), but the goods have never been sold at the RRP or the RRP does not reflect a current market price.

Businesses may also mislead consumers about prices if they:

• promote a sale or special price which is not in fact a temporary sale price, thus creating an unwarranted sense of urgency to make an immediate purchase;
• represent that an advertised price is the total price that you will have to pay when it is not.

Receipts and proof of purchases

You need proof of purchase to return goods to the supplier. A receipt or tax invoice is an example of proof of purchase.

A business must provide proof of transaction if the item you purchased costs $75 or more. If you request a receipt for an item costing less than $75, it must be provided.

Proof of purchase can include:

• a tax invoice;
• a cash register receipt;
• a credit card or debit card statement;
• a handwritten receipt;
• a lay-by agreement;
• a confirmation or receipt number provided for a telephone or internet transaction.