The Australian Consumer Law and unfair contracts
In July 2010 and January 2011, new national laws were introduced to protect consumers from unfair terms in contracts. The Australian Consumer Law website provides information about these changes. These laws include changes to consumer contracts for financial products, and for the supply of financial services.
The Australian Securities and Investment Commission (ASIC) also has important information about 'standard consumer contracts' including contracts for telecommunications, utilities, domestic building and finance agreements.
The Office of Fair Trading can also provide more information about quotes and contracts, including information about the types of contract terms that might be considered unfair.
What is a contract? Can it be verbal (ie just spoken) or does it need to be in writing?
A contract is a legally binding agreement.
Sometimes a contract can be verbal, but some contracts must be in writing. Some examples of where a contract must be in writing are contracts to buy or sell a house or land, getting credit, that is credit contracts, contracts of guarantees or door-to-door sales contracts.
Do children have legal capacity to make a binding contract?
The parents of children under 18 are their legal guardians. This means they have responsibility for the long term wellbeing of the children such as responsibility for decisions about their religion and schooling.
In many situations parents are required to sign on behalf of children under 18. In some situations children do have legal capacity to act on their own behalf. If they have sufficient understanding of the significance of what they are doing, they may make a binding contract for the necessities of life or they may make decisions about their own medical treatment if they understand its significance.
Each legal situation needs to be assessed on its own merits and you should get legal advice.
How do I enter into a contract?
The law says to make a contract you need to have:
- An offer made and accepted
- An agreement about all the essential features of the contract, eg sale price, description of the item, due date for payment
- Consideration - this means that you and each person entering the contract must promise to do something or give something of value, and
- An intention to create the contract. If the contract is between you and friends or relatives, it can sometimes be difficult to show the intention to have the arrangements as a legally binding agreement, that is a contract. But in a commercial or consumer deal it is easy to confirm the intention to create the contract. If you can show that there was an intention to create the legal agreement, then the arrangement can be a legally binding contract.
Should I see a lawyer?
If you have any questions about a particular contract you should get legal advice. A lawyer will need to see all documents which are related to the contract before giving advice.