Fair Trading (Unconscionable Conduct) Act 2001 (Vic)

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Fair Trading (Unconscionable Conduct) Act 2001

Act No. 86/2001

TABLE OF PROVISIONS

Section Page

1. Purpose 1
2. Commencement 1
3. Consequential amendment to section 7 1
4. New sections 8A and 8B inserted 2

8A. Unconscionable conduct in business transactions 2
8B. The price for a supply or acquisition, or possible supply
or acquisition 8

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ENDNOTES 11

i

Victoria

No. 86 of 2001

Fair Trading (Unconscionable Conduct)

Act 2001†

[Assented to 11 December 2001]

The Parliament of Victoria enacts as follows:
1. Purpose
The purpose of this Act is to amend the Fair Trading Act 1999 to prohibit persons from engaging in unconscionable conduct in business
transactions.

2. Commencement
This Act comes into operation on the day after the day on which it receives the Royal Assent.

3. Consequential amendment to section 7

Fair Trading (Unconscionable Conduct) Act 2001

s. 3	Act No. 86/2001

In section 7(2) of the Fair Trading Act 1999, after "section 8" insert "or 8A".

4. New sections 8A and 8B inserted
After section 8 of the Fair Trading Act 1999
insert—
'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 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 sub-section (1) in connection
with the supply or possible supply of goods
or services to another person (the "business

Fair Trading (Unconscionable Conduct) Act 2001

Act No. 86/2001 s. 4
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 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)
circumstances under which, the
business consumer could have acquired
the amount for which, and the services from a person other than the supplier; and

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

Fair Trading (Unconscionable Conduct) Act 2001

s. 4	Act No. 86/2001

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

(ii)
arising from the supplier's
intended conduct (being risks that
the supplier should have foreseen
any risks to the business consumer 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 sub-section (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—

Fair Trading (Unconscionable Conduct) Act 2001

Act No. 86/2001 s. 4

(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)
able to understand any documents
whether the small business supplier was 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)
circumstances in which, the small
business supplier could have supplied
the amount for which, and the services to a person other than the acquirer; and

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

Fair Trading (Unconscionable Conduct) Act 2001

s. 4	Act No. 86/2001

(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)
acquirer that might affect the
any intended conduct of the supplier; and

(ii)
supplier arising from the
acquirer's intended conduct (being
any risks to the small business 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

Fair Trading (Unconscionable Conduct) Act 2001

Act No. 86/2001 s. 4

(b)
the acquisition or possible acquisition 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 sub-section (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 sub-section (1)—
"listed public company" has the same
meaning as in the Income Tax
Assessment Act 1997 of the
Commonwealth.

Fair Trading (Unconscionable Conduct) Act 2001

s. 4	Act No. 86/2001

8B. The price for a supply or acquisition, or

possible supply or acquisition

(1) For the purposes of section 8A(7), the price
for—

(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—
is, subject to the rest of this section, taken to be the amount paid or payable by the person for the goods or services.
(2) For the purposes of section 8A(7), if a
person is supplied with, or acquires, goods or
services by way of a purchase that includes
other property or services and no specified
price was allocated to the goods or services
in the contract under which they were
purchased, the price for the supply or
acquisition of the goods or services is taken
to be—

(a)

the price at which, at the time of the supply or acquisition, the person could have purchased the goods or services from the same supplier without the other property or services; or

(b)

if, at that time, the goods or services were not available for purchase from the supplier without the other property
or services but goods or services of the
kind supplied or acquired were
available for purchase from another
supplier without other property or
services—the lowest price at which the
person could, at that time, reasonably

Fair Trading (Unconscionable Conduct) Act 2001

Act No. 86/2001 s. 4
have purchased goods or services of
that kind from another supplier; or

(c)
kind supplied or acquired were not
available from any supplier for
if, at that time, goods or services of the or services—the value of the goods or services at that time.

(3) For the purposes of section 8A(7), if a
person is supplied with, or acquires, goods or
services other than by way of purchase, the
price for the supply or acquisition of the
goods or services is taken to be—

(a)

the price at which, at the time of the supply or acquisition, the person could have purchased the goods or services from the supplier; or

(b)

if, at that time, the goods or services were not available for purchase from the supplier or were so available only together with other property or services
but goods or services of the kind
supplied or acquired were available for
purchase from another supplier—the
lowest price at which the person could,
at that time, reasonably have purchased
goods or services of that kind from
another supplier; or

(c)

if, at that time, goods or services of the kind supplied or acquired were not available for purchase from any supplier or were not so available separately from other property or services—the value of the goods or services at that time.

Fair Trading (Unconscionable Conduct) Act 2001

s. 4	Act No. 86/2001

(4) For the purposes of section 8A(7) but
without limiting by implication the definition
of "services" in section 3—

(a) the obtaining of credit by a person in connection with the supply to, or acquisition by, the person of goods or services is taken to be the supply to, or acquisition by, the person of a service; and
(b) any amount by which the amount paid or payable by the person for the goods or services is increased by reason of the
person's so obtaining credit is taken to
be paid or payable by the person for
that service.
(5) For the purposes of section 8A(7), the price

for the supply or possible supply, or the
acquisition or possible acquisition, of
services comprising or including a loan or
loan facility is taken to include the capital
value of the loan or loan facility.'.

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Fair Trading (Unconscionable Conduct) Act 2001

Act No. 86/2001 Endnotes

ENDNOTES

†
Minister's second reading speech—
Legislative Assembly: 1 November 2001
Legislative Council: 29 November 2001
The long title for the Bill for this Act was "to amend the Fair Trading
Act 1999 and for other purposes."

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Fair Trading (Unconscionable Conduct) Act 2001 (Vic)

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1.	Purpose	1
2.	Commencement	1
3.	Consequential amendment to section 7	1
4.	New sections 8A and 8B inserted	2

8A.	Unconscionable conduct in business transactions	2
8B.	The price for a supply or acquisition, or possible supply
or acquisition	8

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

(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—

(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)

(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)	circumstances under which, the business consumer could have acquired

(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

(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.

(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)	able to understand any documents

(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)	circumstances in which, the small business supplier could have supplied

(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.

(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.

(a)	a supply or possible supply of goods or services; or
(b)	an acquisition or possible acquisition of goods or services—

(a)	the price at which, at the time of the supply or acquisition, the person could have purchased the goods or services from the same supplier without the other property or services; or
(b)	if, at that time, the goods or services were not available for purchase from the supplier without the other property
or services but goods or services of the kind supplied or acquired were available for purchase from another supplier without other property or services—the lowest price at which the person could, at that time, reasonably

Act No. 86/2001	s. 4
have purchased goods or services of that kind from another supplier; or

(a)	the price at which, at the time of the supply or acquisition, the person could have purchased the goods or services from the supplier; or
(b)	if, at that time, the goods or services were not available for purchase from the supplier or were so available only together with other property or services
but goods or services of the kind supplied or acquired were available for purchase from another supplier—the lowest price at which the person could, at that time, reasonably have purchased goods or services of that kind from another supplier; or
(c)	if, at that time, goods or services of the kind supplied or acquired were not available for purchase from any supplier or were not so available separately from other property or services—the value of the goods or services at that time.

(a)	the obtaining of credit by a person in connection with the supply to, or acquisition by, the person of goods or services is taken to be the supply to, or acquisition by, the person of a service; and
(b)	any amount by which the amount paid or payable by the person for the goods or services is increased by reason of the
person's so obtaining credit is taken to be paid or payable by the person for that service.