CONTENTS I Introduction II Classical Contract Law and Procedural and Substantive Fairness III The Scope of the UCTL A Standard Form Consumer Contracts B Excluded Terms C Determining whether a Term in a Standard Form Contract Is Unfair 1 Does the Term Cause a Significant Imbalance in the Parties' Rights and Obligations under the Contract?
(4) The unfair contract terms law ('UCTL') is based on recommendations of the Productivity Commission in its 2007 Review of Australia's Consumer Policy Framework.
Under the UCTL, a term in a standard form consumer contract will be void if the term is unfair.
The test for unfairness under the UCTL focuses on the substance of the terms (substantive unfairness) rather than flaws in the process through which the contract was made (procedural unfairness).
Part III discusses the scope of the UCTL. Part IV discusses the relationship between the test of unfair terms in the UCTL and the role of transparency, notice and other measures aimed at providing information to consumers about the terms of their contracts.
The threshold test for an unfair term in a standard form consumer contract under the UCTL focuses on the substantive fairness of the term.
(34) A similar tension between concerns of substantive and procedural fairness may well arise under the UCTL.
(40) Unlike these other measures, the UCTL applies only to standard form consumer contracts.
The UCTL creates a rebuttable presumption that a contract is a standard form contract in circumstances where it is alleged that the contract is of such a kind.
The UTCCR similarly excludes from review a term relating to the 'definition of the main subject matter of the contract' (49) and 'the adequacy of the price or remuneration, as against the goods or services supplied in exchange.' (50) Significantly, however, the UCTL, unlike the UTCCR, specifically provides that consideration that is in some way contingent does not form part of the 'price', which is excluded from review as an unfair term.