Reform of the prohibition 
on unconscionable conduct

Jeannie Paterson
Federal

Consumer protection legislation in Australia has, until recently, included different types of protection from ‘unconscionable conduct’ for consumers and for small businesses. From 1 January 2012, the Competition and Consumer Legislation Amendment Act 2011 amends sections 21 and 22 of the Australian Consumer Law (‘ACL’) and sections 12CB and 12CC of the Australian Securities and Investments Commission Act 2001 (‘ASIC Act’) by replacing these different provisions with a unified prohibition on persons engaging in unconscionable conduct in trade and commerce.

The evident intention behind these principles is to broaden the scope of the prohibition. In particular, the principles make clear that, in considering whether conduct is unconscionable, a court may consider the terms of the contract and is not limited to considering the circumstances relating to formation of the contract. This is a potentially significant development because courts had tended to interpret the prohibition on unconscionable conduct as applying to exploitative conduct occurring in the process of contract formation and as not applying to the terms or performance of the contract. An overly harsh or opportunistic enforcement of contract terms might now be challenged as unconscionable contrary to the ACL or the ASIC Act.

JEANNIE PATERSON teaches law at the Melbourne Law School. Jeannie canvassed these changes in DUAO, Vol 36(4) 271.

(2012) 37(1) AltLJ 60
You are here: Home News & Views DownUnderAllOver DUAO - Vol 37(1) Reform of the prohibition 
on unconscionable conduct

Keep in Touch

Twitter Icon
Follow Alt Law Journal on Facebook

Sponsors

Victorian Equal Opportunity & Human Rights Commission Logo

Monash University Logo