Victorian Consolidated Legislation

Fair Trading Act 1999 - SECT 8A

Unconscionable conduct in business transactions

8A. Unconscionable conduct in business transactions



(1) A person must not, in trade or commerce, in connection with-

   (a)  the supply or possible supply of goods or services to another person
        (other than a listed public company); or

   (b)  the acquisition or possible acquisition of goods or services from
        another person (other than a listed public company)-

engage in conduct that is, in all the circumstances, unconscionable.

(2) This section only applies to-

   (a)  the supply or possible supply of goods or services to a person; or

   (b)  the acquisition or possible acquisition of goods or services by a
        person-

whose acquisition or possible acquisition of the goods or services is or would
be for the purpose of trade or commerce.

(3) Without in any way limiting the matters to which a court or the Tribunal
may have regard for the purpose of determining whether a person (the supplier)
has contravened subsection (1) in connection with the supply or possible
supply of goods or services to another person (the business consumer), the
court or Tribunal may have regard to-

   (a)  the relative strengths of the bargaining positions of the supplier and
        the business consumer; and

   (b)  whether, as a result of conduct engaged in by the supplier, the
        business consumer was required to comply with conditions that were not
        reasonably necessary for the protection of the legitimate interests of
        the supplier; and

   (c)  whether the business consumer was able to understand any documents
        relating to the supply or possible supply of the goods or services;
        and

   (d)  whether any undue influence or pressure was exerted on, or any unfair
        tactics were used against, the business consumer or a person acting on
        behalf of the business consumer by the supplier or a person acting on
        behalf of the supplier in relation to the supply or possible supply of
        the goods or services; and

   (e)  the amount for which, and the circumstances under which, the business
        consumer could have acquired identical or equivalent goods or services
        from a person other than the supplier; and

   (f)  the extent to which the supplier's conduct towards the business
        consumer was consistent with the supplier's conduct in similar
        transactions between the supplier and other like business consumers;
        and

   (g)  the requirements of any applicable industry code; and

   (h)  the requirements of any other industry code, if the business consumer
        acted on the reasonable belief that the supplier would comply with
        that code; and

        (i)    the extent to which the supplier unreasonably failed to
               disclose to the business consumer-

   (i)  any intended conduct of the supplier that might affect the interests
        of the business consumer; and

   (ii) any risks to the business consumer arising from the supplier's
        intended conduct (being risks that the supplier should have foreseen
        would not be apparent to the business consumer); and

   (j)  the extent to which the supplier was willing to negotiate the terms
        and conditions of any contract for supply of the goods or services
        with the business consumer; and

   (k)  the extent to which the supplier and the business consumer acted in
        good faith.

(4) Without in any way limiting the matters to which a court or the Tribunal
may have regard for the purpose of determining whether a person (the acquirer)
has contravened subsection (1) in connection with the acquisition or possible
acquisition of goods or services from another person (the small business
supplier), the court or Tribunal may have regard to-

   (a)  the relative strengths of the bargaining positions of the acquirer and
        the small business supplier; and

   (b)  whether, as a result of conduct engaged in by the acquirer, the small
        business supplier was required to comply with conditions that were not
        reasonably necessary for the protection of the legitimate interests of
        the acquirer; and

   (c)  whether the small business supplier was able to understand any
        documents relating to the acquisition or possible acquisition of the
        goods or services; and

   (d)  whether any undue influence or pressure was exerted on, or any unfair
        tactics were used against, the small business supplier or a person
        acting on behalf of the small business supplier by the acquirer or a
        person acting on behalf of the acquirer in relation to the acquisition
        or possible acquisition of the goods or services; and

   (e)  the amount for which, and the circumstances in which, the small
        business supplier could have supplied identical or equivalent goods or
        services to a person other than the acquirer; and

   (f)  the extent to which the acquirer's conduct towards the small business
        supplier was consistent with the acquirer's conduct in similar
        transactions between the acquirer and other like small business
        suppliers; and

   (g)  the requirements of any applicable industry code; and

   (h)  the requirements of any other industry code, if the small business
        supplier acted on the reasonable belief that the acquirer would comply
        with that code; and

        (i)    the extent to which the acquirer unreasonably failed to
               disclose to the small business supplier-

   (i)  any intended conduct of the acquirer that might affect the interests
        of the small business supplier; and

   (ii) any risks to the small business supplier arising from the acquirer's
        intended conduct (being risks that the acquirer should have foreseen
        would not be apparent to the small business supplier); and

   (j)  the extent to which the acquirer was willing to negotiate the terms
        and conditions of any contract for the acquisition of the goods and
        services with the small business supplier; and

   (k)  the extent to which the acquirer and the small business supplier acted
        in good faith.

(5) A person is not to be taken for the purposes of this section to engage in
unconscionable conduct in connection with-

   (a)  the supply or possible supply of goods or services to another person;
        or

   (b)  the acquisition or possible acquisition of goods or services from
        another person-

by reason only that the first-mentioned person institutes legal proceedings in
relation to that supply, possible supply, acquisition or possible acquisition.

(6) For the purpose of determining whether a person has contravened subsection
(1)-

   (a)  the court or Tribunal must not have regard to any circumstances that
        were not reasonably foreseeable at the time of the alleged
        contravention; and

   (b)  the court or Tribunal may have regard to circumstances existing before
        the commencement of this section but not to conduct engaged in before
        that commencement.

(7) This section does not apply to-

   (a)  a supply or possible supply of goods or services; or

   (b)  an acquisition or possible acquisition of goods or services-

at a price in excess of $3 000 000 or such higher amount as is prescribed.
Note Section 8B deals with the price for a supply or acquisition, or possible
supply or acquisition, of goods or services.

(8) In subsection (1)-

listed public company has the same meaning as in the
Income Tax Assessment Act 1997 of the Commonwealth.