Trade Practices Amendment (Fair Trading) Act 1998

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No. 36, 1998

Trade Practices Amendment (Fair Trading) Act 1998

No. 36, 1998

An Act to amend the Trade Practices Act 1974, and for related purposes

Contents

1 Short title..................................1

2 Commencement..............................1

3 Schedule(s).................................2

Schedule 1—Amendments relating to industry codes 3

Trade Practices Act 1974 3

Schedule 2—Amendments relating to unconscionable conduct 6

Trade Practices Act 1974 6

Trade Practices Amendment (Fair Trading) Act 1998

No. 36, 1998

An Act to amend the Trade Practices Act 1974, and for related purposes

[Assented to 22 April 1998]

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Trade Practices Amendment (Fair Trading) Act 1998.

2 Commencement

(1) Subject to subsection (2), this Act commences on the day on which it receives the Royal Assent.

(2) Schedule 2 commences:

(a) if this Act receives Royal Assent before 1 January 1998—on 1 July 1998; or

(b) in any other case:

(i) on a day after 30 June 1998 that is fixed by Proclamation; or

(ii) on the first day after the end of the period of 6 months starting when this Act receives the Royal Assent;

whichever is earlier.

3 Schedule(s)

Subject to section 2, each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1—Amendments relating to industry codes

Trade Practices Act 1974

1 After Part IVA

Insert:

Part IVB—Industry Codes

51ACA Definitions

(1) In this Part:

applicable industry code, in relation to a corporation that is a participant in an industry, means:

(a) the prescribed provisions of any mandatory industry code relating to the industry; and

(b) the prescribed provisions of any voluntary industry code that binds the corporation.

consumer, in relation to an industry, means a person to whom goods or services are or may be supplied by participants in the industry.

industry code means a code regulating the conduct of participants in an industry towards other participants in the industry or towards consumers in the industry.

mandatory industry code means an industry code that is declared by regulations under section 51AE to be mandatory.

voluntary industry code means an industry code that is declared by regulations under section 51AE to be voluntary.

(2) For the purposes of this Part, a voluntary industry code binds a person who has agreed, as prescribed, to be bound by the code and who has not subsequently ceased, as prescribed, to be bound by it.

(3) To avoid doubt, it is declared that:

(a) franchising is an industry for the purposes of this Part; and

(b) franchisors and franchisees are participants in the industry of franchising, whether or not they are also participants in another industry.

51AD Contravention of industry codes

A corporation must not, in trade or commerce, contravene an applicable industry code.

51AE Regulations relating to industry codes

The regulations may:

(a) prescribe an industry code, or specified provisions of an industry code, for the purposes of this Part; and

(b) declare the industry code to be a mandatory industry code or a voluntary industry code; and

(c) for a voluntary industry code, specify the method by which a corporation agrees to be bound by the code and the method by which it ceases to be so bound (by reference to provisions of the code or otherwise).

2 Subsection 75B(1)

After “IVA”, insert “, IVB”.

3 Paragraph 80(1)(a)

After “IVA”, insert “, IVB”.

4 Subsection 80A(1)

After “Part”, insert “IVB or”.

5 Subsection 82(1)

After “IV”, insert “, IVB”.

6 Section 83

After “IVA”, insert “, IVB”.

7 Subsections 84(1) and (3)

After “IVA”, insert “, IVB”.

8 Subsection 86(2)

After “IVA”, insert “or IVB”.

9 Paragraph 86A(1)(b)

After “IVA”, insert “or IVB”.

10 Subsections 87(1), (1A), (1B) and (1C)

After “IVA”, insert “, IVB”.

11 Before paragraph 95(1)(a)

Insert:

(aa) notices relating to voluntary industry codes given to the Commission pursuant to regulations made under section 51AE (including notices that have been withdrawn pursuant to those regulations); and

12 At the end of paragraphs 95(1)(a), (b), (c), (d), (e), (f), (g) and (ga)

Add “and”.

13 Paragraphs 170(1)(a) and (c)

After “under”, insert “Part IVB,”.

Schedule 2—Amendments relating to unconscionable conduct

Trade Practices Act 1974

1 Subsection 51AA(2)

After “51AB”, insert “or 51AC”.

2 At the end of Part IVA

Add:

51AC Unconscionable conduct in business transactions

(1) A corporation must not, in trade or commerce, in connection with:

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

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

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

(2) A person must not, in trade or commerce, in connection with:

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

(b) the acquisition or possible acquisition of goods or services from a corporation (other than a listed public company);

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

(3) Without in any way limiting the matters to which the Court may have regard for the purpose of determining whether a corporation or a person (the supplier) has contravened subsection (1) or (2) in connection with the supply or possible supply of goods or services to a person or a corporation (the business consumer), the Court 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 the Court may have regard for the purpose of determining whether a corporation or a person (the acquirer) has contravened subsection (1) or (2) in connection with the acquisition or possible acquisition of goods or services from a person or corporation (the small business supplier), the Court 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 or refers to arbitration a dispute or claim in relation to that supply, possible supply, acquisition or possible acquisition.

(6) For the purpose of determining whether a corporation has contravened subsection (1) or whether a person has contravened subsection (2):

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

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

(7) A reference in this section to the supply or possible supply of goods or services is a reference to the supply or possible supply of goods or services to a person whose acquisition or possible acquisition of the goods or services is or would be for the purpose of trade or commerce.

(8) A reference in this section to the acquisition or possible acquisition of goods or services is a reference to 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.

(9) A reference in this section to the supply or possible supply of goods or services does not include a reference to the supply or possible supply of goods or services at a price in excess of $1,000,000, or such higher amount as is prescribed.

(10) A reference in this section to the acquisition or possible acquisition of goods or services does not include a reference to the acquisition or possible acquisition of goods or services at a price in excess of $1,000,000, or such higher amount as is prescribed.

(11) For the purposes of subsections (9) and (10):

(a) subject to paragraphs (b), (c), (d) and (e), the price for:

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

(ii) the acquisition or possible acquisition of goods or services by a person;

is taken to be the amount paid or payable by the person for the goods or services; and

(b) paragraph 4B(2)(c) applies as if references in that paragraph to the purchase of goods or services by a person were references to:

(i) the supply of goods or services to a person pursuant to a purchase; or

(ii) the acquisition of goods or services by a person by way of purchase;

as the case requires; and

(i) the reference in that paragraph to a person acquiring goods or services otherwise than by way of purchase included a reference to a person being supplied with goods or services otherwise than pursuant to a purchase; and

(ii) a reference in that paragraph to acquisition included a reference to supply; and

(d) paragraph 4B(2)(e) applies as if references in that paragraph to the acquisition of goods or services by a person, or to the acquisition of services by a person, included references to the supply of goods or services to a person, or the supply of services, to a person, as the case may be; and

(e) 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.

(12) Section 51A applies for the purposes of this section in the same way as it applies for the purposes of Division 1 of Part V.

(13) Expressions used in this section that are defined for the purpose of Part IVB have the same meaning in this section as they do in Part IVB.

(14) In this section, listed public company has the same meaning as it has in the Income Tax Assessment Act 1997.

3 Subsection 82(1)

After “or V”, insert “or section 51AC”.

[Minister's second reading speech—

made in House of Representatives on 30 September 1997

tabled in Senate on 4 December 1997]

(145/97)

Overview

The Trade Practices Amendment (Fair Trading) Act 1998, enacted by the Parliament of Australia, aims to amend the Trade Practices Act 1974 to address gaps in fair trading practices. This legislation introduces two primary objectives: the regulation of industry codes and the prohibition of unconscionable conduct in business transactions. The policy objective is to enhance consumer protection and ensure fair trading practices by imposing stricter standards on corporations and individuals in their commercial dealings. This Act complements the existing framework by establishing specific rules for industry codes and providing clearer guidelines for what constitutes unconscionable conduct in business transactions, thereby fostering a fairer marketplace. The Trade Practices Amendment (Fair Trading) Act 1998 commenced on the day it received Royal Assent, with certain provisions beginning on 1 July 1998 or a later date determined by proclamation or six months after Royal Assent. The Act amends the Trade Practices Act 1974 by introducing new sections and provisions, including the establishment of mandatory and voluntary industry codes and the criteria for determining unconscionable conduct in business dealings. These amendments are detailed in the schedules of the Act, which outline the specific changes to be made to the Trade Practices Act 1974.

Scope and Application

The Trade Practices Amendment (Fair Trading) Act 1998 is a Commonwealth Act that amends the Trade Practices Act 1974 to enhance protections for consumers and businesses in trade and commerce. The Act applies to corporations, defined as entities that are subject to the Trade Practices Act 1974, and to any person engaged in trade or commerce, particularly focusing on the conduct of corporations in business transactions. The scope of the Act extends to all industries, with specific provisions for industry codes and unconscionable conduct in business transactions. Notably, the Act does not apply to transactions involving listed public companies and excludes transactions exceeding a monetary threshold of $1,000,000 or a higher amount as prescribed. The Act's provisions are implemented through regulations that may specify industry codes and declare them as either mandatory or voluntary, thereby extending and detailing the application of the Act through subordinate instruments. The Act commenced on the day of Royal Assent, with certain provisions under Schedule 2 commencing later in 1998, depending on the timing of the Act's assent.

Key Provisions

The Trade Practices Amendment (Fair Trading) Act 1998 (Cth) amends the Trade Practices Act 1974 (Cth) to introduce new provisions concerning industry codes and unconscionable conduct in business transactions. The primary focus of this Act is to enhance fair trading practices by imposing stricter regulations on industry codes and prohibiting unconscionable conduct in trade or commerce. The amendments are detailed in Schedule 1 and Schedule 2 of the Act, which respectively relate to industry codes and unconscionable conduct. Schedule 1 introduces Part IVB into the Trade Practices Act 1974, focusing on industry codes. Section 51AD mandates that corporations must not contravene any applicable industry codes in trade or commerce. An "applicable industry code" includes both mandatory and voluntary provisions of industry codes that bind a corporation. Section 51AE allows the regulations to prescribe these codes, declare them as mandatory or voluntary, and specify the method by which corporations agree to be bound by them. The schedules also integrate these new provisions into other relevant sections of the Trade Practices Act 1974, ensuring consistency across the Act. The obligations imposed by the Act on corporations and other entities include adherence to applicable industry codes. Corporations must ensure that their conduct complies with the prescribed provisions of both mandatory and voluntary industry codes. This involves understanding the specific requirements of the codes that apply to their industry and ensuring that all business practices align with these codes. Additionally, entities must be aware of the regulations that specify how industry codes are to be adopted and enforced. Violations of the Act's provisions are subject to various consequences. Section 51AD explicitly states that contraventions of applicable industry codes are prohibited. While the Act does not specify maximum penalties within its text, contraventions of industry codes can lead to enforcement actions by the Australian Competition and Consumer Commission (ACCC), which may include court proceedings. Penalties for breaches of trade practices legislation can include substantial fines for corporations, as well as orders for redress or compensation to affected parties. The severity of penalties depends on the nature and extent of the breach, with repeat offenders potentially facing increased penalties. Additionally, individuals involved in the management of corporations found in breach may also face personal penalties, including fines and disqualification from managing corporations.

Area of Law: Commercial Law
Instrument: Act
Concepts: Commencement Provisions; Regulatory Standards; Prohibited Conduct; Reporting & Disclosure Obligations

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

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