conduct is any behaviour which has the effect of unlawfully placing
the other party to a transaction at a serious disadvantage. Section 13
of the Fair Trading Act (the Act) provides a remedy by empowering the
court to order a trader to change their behaviour in relation to
the supply of goods or services normally purchased for personal or
domestic use. The following situations may be taken into account
when determining whether unconscionable behaviour has taken place:
- the bargaining
strengths of the supplier and the consumer are unequal.
- the consumer
was unable to understand any documents involved.
- the consumer
was required to agree to conditions which were unnecessary to the
- any undue
influence or pressure was exerted on the consumer.
- any unfair
tactics were used against the consumer.
practical terms, this means that a business person cannot use a
particular weakness of a person in order to gain business. Nor can
the business person try to put the consumer at a disadvantage in
order to gain their business.
- not ensuring
that a consumer with limited reading skills or with limited English fully
understood and agreed to any contract signed.
- using a friend
or relative of the consumer to influence the consumer's decision.
- inducing the
consumer to sign a blank contract.
advantage of the consumer's sickness, age or disabilities
- contracts which
make false statements.
- one sided
contracts. For instance, contracts that are unclear about the
consumer's rights, contracts that are so tough the consumer cannot
help breaking them or contracts that can be broken easily by the
business but not by the consumer.
- using high
pressure tactics, for example refusing to take "no" for an answer.
careful when signing contracts! It is important to remember that
consumers do not have to sign anything they don't agree to. Even if
the business uses a standard contract, consumers have aright to try
and negotiate terms that suit them better.
also have a right to be informed about exactly what terms they will
be agreeing to.
recent Federal Court decision awarded $82,000 compensation to three
franchisees of the Cheap As Chips group for unconscionable conduct.
This included the termination of a franchise over a payment dispute;
threatening to terminate franchisees rather than negotiate over money
owed and attendance at seminars unrelated to the company's business
of carpet cleaning.
are many other known instances of unconscionable conduct including
pressure applied by landlords for advantages when leases are up for
renewal. Unconscionable conduct goes beyond driving a hard bargain.
It involves situations of power imbalance where the stronger party
takes advantage of the weaker when the weaker party is at a
- MARKET GARDENERS
Federal Court of Australia declared that Avanti Investments had
engaged in unconscionable conduct and made various misrepresentations
to the lessees who were Vietnamese farmers with little formal
education or knowledge of English. In 1994 Avanti entered into
agreements with two farmers to lease the land for eight years with no
limitation on bore water use. This land was later sublet to the
five farmers in dispute who invested considerable resources into
working the land. In 1998 Avanti unlawfully claimed a right to break
and vary the leases, and in 1998 and 1999, made the farmers sign new
leases reducing the amount of water available. The farmers were also
told that the leases were the same as the 1994 lease except for the
rent and the terms. Avanti demanded payment from the farmers of over
$67 000 for excess water for the years 1998/1999 and 1999/2000. M R