Body Corporate ManagerIssuesLegislation

Unfair Body Corporate contracts

Good news!  Remember our post from a while back that looked at the indemnify clauses that some Body Corporate Managers insert in their contracts.  These clauses are akin to a get out of jail free card for the professional advice that a Body Corporate Manager exercises when administering your scheme.  Well, the Federal government has been listening.

Since November last year, any new contract agreed by a Body Corporate will be less one sided.  The Australian Consumer Law now protects small businesses from unfair terms in standard form contracts.  A standard form contract is one that has been prepared by one party to the contract and where the other party has little or no opportunity to negotiate the terms – that is, it is offered on a ‘take it or leave it’ basis.  The law sets out examples of terms that may be unfair, including:

  • terms that enable one party (but not another) to avoid or limit their obligations under the contract
  • terms that enable one party (but not another) to terminate the contract

Both of these examples may be helpful for Bodies Corporate and their committees.  Ultimately, only a court or tribunal (not the ACCC) can decide that a term is unfair.