First Principles of Business Law

4. Protection against unfair terms in contracts

4.2. Identifying regulated contracts

A is moving out of her parents' house into an apartment of her own. She wants to buy all the furniture and appliances that she needs from one supplier so that she can negotiate the best possible price. She goes to a furniture store called YourHome and chooses all the things she wants. All together, the marked prices of the various goods add up to $30,000. A tells the shop owner that she wants a discount of at least 10% and the shop owner agrees to this, provided A pays for everything immediately. A agrees to these terms and pays $27,000 to the shop owner. The shop owner writes out an invoice setting out what A has bought and gives her a receipt for the payment.   Would s 23 of the ACL, which regulates the inclusion of unfair terms in consumer contracts, apply to this contract?  Click here to see section 23. 

(a) Yes, s 23 would regulate the inclusion of unfair terms in this contract simply because the facts show that A bought household goods for her own use. The price she paid does not matter.

(b) No, s 23 would not regulate the inclusion of unfair terms in this contract because, although A bought household goods for her own use, she paid too much for them to qualify as a consumer.

(c) No, s 23 would not regulate the inclusion of unfair terms in this contract because, although A bought household goods for her own use, and the price she paid does not make any difference, the contract she entered into was not a 'standard form' contract.