Section 23 — Competition and Consumer Act 2010: Unfair terms of consumer contracts and small business contracts

(1) A term of a consumer contract or small business contract is void if: (a) the term is unfair; and (b) the contract is a standard form contract. (2) The contract continues to bind the parties if it is capable of operating without the unfair term. (2A) A person contravenes this subsection if: (a) the person makes a contract; and (b) the contract is a consumer contract or small business contract; and (c) the contract is a standard form contract; and (d) a term of the contract is unfair; and (e) the person proposed the unfair term. Note: A pecuniary penalty may be imposed for a contravention of this subsection: see section 224. (2B) A person who contravenes subsection (2A) commits a separate contravention of that subsection in respect of each term that is unfair and that the person proposed. (2C) A person contravenes this subsection if: (a) the person applies or relies on, or purports to apply or rely on, a term of a contract; and (b) the contract is a consumer contract or small business contract; and (c) the contract is a standard form contract; and (d) the term is unfair. Note: A pecuniary penalty may be imposed for a contravention of this subsection: see section 224. (3) A consumer contract is a contract for: (a) a supply of goods or services; or (b) a sale or grant of an interest in land; to an individual whose acquisition of the goods, services or interest is wholly or predominantly for personal, domestic or household use or consumption. (4) A contract is a small business contract if: (a) the contract is for a supply of goods or services, or a sale or grant of an interest in land; and (b) at least one party to the contract satisfies either or both of the following conditions: (i) the party makes the contract in the course of carrying on a business and at a time when the party employs fewer than 100 persons; (ii) the party’s turnover, worked out under subsection (6) for the party’s last income year (within the meaning of the Income Tax Assessment Act 1997) that ended at or before the time when the contract is made, is less than $10,000,000. (5) In counting for the purposes of subparagraph (4)(b)(i) the number of persons that a person employs: (a) a casual employee is not to be counted unless employed on a regular and systematic basis; and (b) a part-time employee (including a part-time casual employee counted under paragraph (a) of this subsection) is to be counted as an appropriate fraction of a full-time equivalent. (6) For the purposes of subparagraph (4)(b)(ii), a party’s turnover for a period is the sum of the values of all supplies the party made during the period, other than the following: (a) supplies that are input taxed; (b) supplies that are not for consideration (and are not taxable supplies under section 72-5 of the A New Tax System (Goods and Services Tax) Act 1999); (c) supplies that are not made in connection with an enterprise that the party carries on; (d) supplies that are not connected with the indirect tax zone. (7) Expressions used in subsection (6) that are also used in the A New Tax System (Goods and Services Tax) Act 1999 have the same meaning as in that Act.