First Principles of Business Law

4. Protection against unfair terms in contracts

4.3. Identifying unfair terms

A, a music student, inherits a large sum of money and decides to buy a top quality piano for herself. She finds the piano she wants at UTunes Music Store. It costs $50,000. When she asks to buy it, the store owner gets A to sign a printed contract which contains the price and a description of the piano. The contract contains a term that states that A gives up any right to complain if the piano, when delivered, suffers from any superficial scratches or marks. The shop owner explains that this term is necessary because pianos are large and heavy and it is difficult to move them without bumping into anything. A signs the contract but later regrets having given up her right to complain if the piano has any scratches or marks.

Is it likely that this term would be considered an unfair term under the provisions of the ACL?

Click here to see section 24.     Click here to see section 25.

 (a) The term in question was clear, unambiguous and not unreasonable. It was also clearly set out in the contract, and explained to A. It would not be considered an unfair term.

(b) Although the term in question is reasonably clear and unambiguous, and although it was explained to A, it is not a term that is necessary to protect the seller's legitimate interests and it seriously affects A's normal contractual rights. It would likely be considered an unfair term.