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As mentioned in our article of March 2016, help is on the way via the regulators for protecting small business against “the big boys” and unfair contract provisions.
This policy extends to consumers and is supported by a recent case where the ACCC focused on unfair contract terms provided by Europcar to its consumers.
In the recent case of Australian Competition and Consumer Commission [ACCC] vs CLA Trading Pty Ltd [Europcar]  FCA 377 the Australian Competition and Consumer Commission [ACCC] had brought proceedings against CLA Trading Pty Ltd, trading as Europcar Australia [“Europcar”], claiming that particular terms in Europcar’s standard rental agreements were “unfair” for consumers.
The “unfair” terms referred to by the ACCC in their claim included:
Under the Australian Consumer Law, where a standard form contract contains a term that is deemed to be “unfair”, this term will be void and treated as if it had never existed in the contract. A contractual term is considered to be unfair if it would:
The Court held that these were unfair as they caused significant imbalances in the rights and obligations of the parties and were not necessary to protect Europcar’s legitimate interests.
The Court also found that Europcar’s representations to consumers on their website were misleading in nature as they contradicted the unlimited liability imposed on consumers in Europcar’s rental agreements.
In resolving these proceedings Europcar agreed to the facts and joint submissions to be put to the Court and consented to orders for injunctions, corrective advertising and costs. Europcar have since amended their standard rental agreement to remove the unfair terms and their website to remove the misleading statements.
This decision highlights the importance of fair contractual terms and to avoid simply relying on standard contractual terms to be able to hold consumers liable for breaches, or in the case of rental agreements, to hold consumers liable for loss or damage.