In light of growing calls for the introduction of penalties for the unfair terms in standard form contracts.

Partner, Sarah Johnson, examines emerging themes in the consideration of unfair contract terms

Calls for Reform

On 25 January 2019, Labor announced that it plans to make it illegal and impose fines of up to $10 million on suppliers caught putting unfair terms into contracts with small business. This announcement follows a number of recent statements by the ACCC, including by Mr Rod Sims, the Chair of the ACCC, at a speech to the National Small Business Summit in which he stated that the current unfair contracts protections for small business in the Australian Consumer Law have two fundamental problems:

Author: Dieter Hauck

Introduction
A recently published decision by the Cartel Court demonstrates how a long-term relationship turned into an equally lengthy disagreement, which came to a decisive turning point in the courts.(1) An Austrian company, active since 1824 in the rubber and plastic industry (Semperit), formed a joint venture in Thailand in 1989 with a group of Thai companies (STA) for the production of examination gloves made from natural rubber. While Semperit contributed industrial know-how, STA had local facilities and access to a supply of natural rubber. Together with the joint venture, separate distribution agreements were concluded, which basically reserved exclusive distribution of the products in Europe and the Middle East for Semperit. From 2015, STA also tried to sell the products outside Thailand, including in Europe. This led to several disputes in and out of the courts commenced by Semperit in an attempt to prevent STA from selling the products, including arbitral proceedings before the International Chamber of Commerce.

On October 24, 2018, the Court of Justice of the European Union (CJEU) delivered its preliminary ruling in the case between Apple and eBizcuss, a former reseller of Apple products. (Case C‑595/17).

The judgment addresses a heavily contested issue: the application of contractual jurisdiction clauses in actions for damages for infringements of competition law. Importantly, the preliminary ruling distinguishes between Article 101 of the Treaty of the Functioning of the European Union (TFEU) (which deals with anti-competitive agreements and concerted practices such as cartels) and Article 102 of the TFEU (which deals with abuse of dominance) as regards the applicability of choice of forum clauses to competition damages claims.

Authors: Ian Nathaniel, Partner and Conrad Banasik, Associate

The small business unfair contract term legisation has been in force for almost 2 years, and the ACCC has been making enforcement of this legislation a priority.

However, ACCC Chairman Rod Sims has recently said that these changes are “deeply flawed”. He said that the law “does not go far enough, and its limitations really tie our hands as a regulator. What we want is unfair contract terms to be made illegal and we want huge penalties to apply.”

Ian Nathaniel, Partner and Conrad Banasik, Associate, take a look at recent ACCC enforcement action and whether the legislation needs to be strengthened.