Consumer Protection and Australian Consumer Law Disputes
The Australian Consumer Law is not about consumers. It is about conduct in trade or commerce, and it applies between businesses.
That misconception costs businesses real money in both directions. Companies with strong commercial claims never make them, because they assume the legislation is for retail customers. Others discover their standard form contracts contain unenforceable terms, or that a supply arrangement gave the other side statutory rights the contract said they did not have.
The Australian Consumer Law provides remedies that ordinary contract law does not, including power for a court to vary or set aside a contract, compensation without a contractual relationship, and injunctive relief. Used properly, it is one of the most flexible tools in a commercial dispute.
Boyle Litigation acts for businesses making and defending Australian Consumer Law claims, and for businesses facing action by the Australian Competition and Consumer Commission or a state regulator. Litigation is the only work we do.
What we act in
Unfair contract terms
The unfair contract terms regime applies to standard form contracts with consumers and with small businesses, and the small business threshold now captures counterparties considerably larger than most people assume. A term is unfair where it causes a significant imbalance in the parties’ rights, is not reasonably necessary to protect a legitimate interest, and would cause detriment if relied on. Unfair terms are void and unenforceable, and since the 2023 reforms proposing, applying or relying on one can also attract civil penalties.
We act for businesses resisting the enforcement of oppressive terms in contracts imposed on them by larger counterparties, and for businesses whose own standard terms have been challenged.
Unconscionable conduct
Where a stronger party has exploited another’s special disadvantage, or has engaged in conduct that goes against conscience in a commercial dealing, statutory unconscionable conduct claims are available. Special disadvantage is not limited to financial vulnerability. It can include inexperience, dependence, pressure, or a lack of ability to protect one’s own interests in the particular dealing. The court’s remedial powers are broad, including varying or refusing to enforce a contract.
Consumer guarantees and supply disputes
Statutory guarantees apply to goods and services supplied in trade or commerce, and businesses acquiring goods or services can be protected by them, including for acquisitions up to the statutory threshold and for vehicles and trailers used in transporting goods regardless of price. Where there is a major failure, the acquirer can reject the goods or terminate the service and recover, in addition to damages for consequential loss.
We act on both sides: for businesses that have acquired equipment, systems or services that do not perform, and for suppliers and manufacturers defending claims and managing indemnity arrangements up the supply chain.
Product liability and safety
Claims for goods with safety defects, recalls, mandatory reporting obligations, and disputes between manufacturers, importers and distributors about who bears the loss. These matters usually involve insurers from an early stage and are best managed with that in mind.
Industry codes
Disputes under the mandatory industry codes prescribed under the competition and consumer legislation, including the Franchising Code and other prescribed codes. Contravention of a code is itself a contravention of the legislation.
Regulator investigations and enforcement
Responding to statutory information notices, managing an investigation, negotiating enforceable undertakings, responding to infringement notices, and defending proceedings. Penalties for corporations under the Australian Consumer Law are now substantial, calculated as the greatest of a fixed maximum, a multiple of the benefit obtained, or a percentage of turnover for the breach period. The early stages of an investigation are where exposure is created, and what is provided at that point is difficult to walk back.
Why businesses use this legislation
In a commercial dispute, the Australian Consumer Law is often the stronger claim to run alongside a contract claim, for reasons that have nothing to do with consumer protection.
| Advantage | Why it matters commercially |
|---|---|
| No need to prove intention | Conduct can contravene the legislation without any intention to mislead or to act unfairly |
| Broader remedies | A court can vary a contract, refuse to enforce a term, or set the contract aside, which contract law alone will not do |
| Claims outside privity | Compensation may be available against a party you never contracted with, including individuals involved in the conduct |
| Terms cannot be contracted out of | Entire agreement and exclusion clauses do not defeat statutory rights |
| Injunctive relief | Available to restrain contravening conduct, including on an urgent basis |
| Pressure | Exposure to penalties and to regulator attention changes how a corporate opponent values settlement |
Advantage
Payment claim
Why it matters commercially
The earlier of the period stated in the contract and 15 business days after the payment claim is given
Who we act for
Where claims fail
- Businesses acquiring goods, equipment, systems or services that have failed to perform
- Suppliers, manufacturers, importers and distributors defending claims and managing supply chain indemnities
- Small and medium businesses locked into standard form contracts imposed by a larger counterparty
- Businesses whose own standard terms or trading terms have been challenged
- Franchisors and franchisees in code and conduct disputes
- Businesses and directors facing regulator investigation, statutory notices or enforcement proceedings
- Purchasers of businesses and assets where representations, disclosures or conduct in the sale process caused loss
Regulator contact: what to do first
Do not answer it yourself.
A statutory information notice is compulsory and cannot be ignored, but what is produced, how it is described, and what is volunteered alongside it will shape everything that follows. Legal privilege protects some material and not other material, and the distinction is easy to lose in a cooperative first response. Get advice before responding, not after.
- Assess the notice, its scope, and what must actually be produced
- Preserve documents and stop informal internal circulation that may waive privilege
- Manage the response so that cooperation does not become admission
- Advise on enforceable undertakings and infringement notices, and whether accepting one is the right commercial outcome
- Defend proceedings where the position is contestable
Why Boyle Litigation
- Litigation only. We do not write your terms and conditions or run your compliance program. We litigate about them.
- We run the Australian Consumer Law as a commercial weapon, alongside the contract claim, rather than as a compliance exercise.
- We run the Australian Consumer Law as a commercial weapon, alongside the contract claim, rather than as a compliance exercise.
- Fast where a regulator is involved or an injunction is needed.
- Discreet. Regulator matters and product issues carry reputational risk well beyond the legal outcome.
Frequently asked questions
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Does the Australian Consumer Law apply to business to business dealings?
Yes, in many respects. The prohibitions on misleading and deceptive conduct and on unconscionable conduct apply to conduct in trade or commerce generally, not only to dealings with consumers. The unfair contract terms regime applies to standard form contracts with small businesses as well as consumers. The consumer guarantees can also apply to business acquisitions in defined circumstances. Assuming the legislation is irrelevant because both parties are businesses is one of the more expensive mistakes we see.
What makes a contract term unfair?
Broadly, a term in a standard form consumer or small business contract is unfair where it would cause a significant imbalance in the parties’ rights and obligations, is not reasonably necessary to protect the legitimate interests of the party advantaged by it, and would cause detriment if it were relied on. The court also considers how transparent the term is and the contract as a whole. Terms allowing one party alone to vary, terminate or determine performance are commonly scrutinised. An unfair term is void, and since the 2023 reforms proposing or relying on one can also expose a business to civil penalties.
Can my business rely on the consumer guarantees?
Sometimes. The guarantees can apply where goods or services are acquired up to the statutory monetary threshold, or where the goods are of a kind ordinarily acquired for personal, domestic or household use, and separately for vehicles and trailers used mainly to transport goods regardless of price. They do not generally apply where goods are acquired for resupply or for use in manufacturing. Whether they apply to a particular acquisition depends on what was bought, how much was paid, and what it was for.
What is a major failure and what can I claim?
A major failure is a substantial problem, including where the goods or services would not have been acquired had the failure been known, where they differ significantly from what was described or demonstrated, where they are substantially unfit for purpose and cannot easily be remedied, or where goods are unsafe. Where there is a major failure, the acquirer can generally reject the goods and seek a refund or a replacement, or terminate a service contract, and can also claim damages for reasonably foreseeable consequential loss. Where the failure is not major, the supplier generally has the right to remedy it.
What is unconscionable conduct in a commercial context?
Statutory unconscionable conduct is conduct in trade or commerce that goes against conscience, judged by reference to a range of factors including the relative bargaining strength of the parties, whether unfair tactics were used, whether terms were fully explained, and the extent to which the parties acted in good faith. It is not limited to cases involving a vulnerable individual, and it can arise between commercial parties, including in supply, franchising and lending relationships. Remedies include damages, and orders varying or refusing to enforce a contract.
What should I do if the ACCC contacts my business?
Take advice before responding. Statutory information notices are compulsory and must be complied with, but the scope of what is required, how documents are described, and what is volunteered all affect the outcome. Legal privilege applies to some material and not other material, and privilege can be lost through informal internal handling. The early stage of an investigation is where exposure is usually created, so the response should be managed from the beginning rather than corrected later.
What penalties apply for breaching the Australian Consumer Law?
Penalties for corporations are substantial and are calculated as the greatest of a fixed statutory maximum, a multiple of the benefit obtained from the conduct, or a percentage of the corporation’s adjusted turnover during the breach period. Individuals involved in a contravention can also be personally penalised. Because the turnover based calculation can produce very large figures for a larger business, the exposure is often materially greater than the amount in dispute in the underlying commercial matter.
How long do I have to bring a claim under the Australian Consumer Law?
Time limits vary by the type of claim and are generally shorter than the six year period that applies to contract claims in Queensland, with some claims subject to a period running from when the loss was or should have been discovered. Because the limitation position differs between provisions, and because delay also erodes the evidence these claims depend on, the limitation question should be checked at the outset rather than assumed.