Unfair Contract Terms- ACCC new penalties

SaveH2O · Oct 30, 2023 8:43 am

https://www.accc.gov.au/media-release/b ... aw-changes

Text below quoted from the above ACCC media release.

"From 9 November 2023, changes to the Australian Consumer Law will prohibit businesses from proposing, using, or relying on unfair contract terms in standard form contracts with consumers and small businesses.

The changes will allow Courts to impose substantial penalties on businesses and individuals who include unfair terms in their standard form contracts. Currently, a Court can only declare specific terms of a contract unfair and therefore void."

building-expert · Oct 30, 2023 9:46 am

One of the unfair terms In industry standard building contracts, which BTW i think is contrary to DBCA1995 is failure to exclude provisional sums from the contract sum for the purposes of progress payments.

Original contract sum less provisional sums is adjusted contract sum for the purposes of progress claims.

It unfairly allows builders to claim parts of provisional sums even though no work is carried out.

Money upfront for nothing or money lost if builder becomes insolvent. Money forfeited to the builder even if no works are carried out if the owner does not know or did not get competent independent advice.

The ACT requires builder to provide evidence of cost to claim provisional sum.

Ardo · Oct 30, 2023 11:01 am

My friend just got a contract stating that delays to construction due to weather and 'labour shortages' are the not the responsibility of the builder.

SaveH2O · Oct 30, 2023 6:32 pm

Getting rid of unfair contract clauses that penalise owners financially and by adding build days to completion times when they use a private building consultant to do stage inspections is well overdue.

Infinite-Justice · Oct 30, 2023 7:27 pm

The ACCC has had a few go's on the volume builders on the standard form HIA contracts under the UCT regime and have not found many of the special conditions to be unfair.

And they have not even found / alleged the $1 default liquidated damages to be unfair.

The whole system heavily favours the builders and developers, and the government is ultimately responsible for the current status. The ACCC is not going after any participants in the real estate industry with the same or comparable levels of rigour as it had towards some of the other industries.

The penalty regime will change nothing.

building-expert · Oct 31, 2023 7:08 am

I believe that liquidated damaged should be amount of actual loss to the owner from the delays.

The issue in all of this is building industry lobbying and contributing to politicians re elections that corrupts the best intent of laws and regulations, by non enforcement.
For example DBCA1995 has range of infringement penalties against builders for offences and infringements but i have never heard them applied.