12BFUnfair terms of consumer contracts and small business contracts

#### 12BF Unfair terms of consumer contracts and small business contracts (1) A term of a consumer contract or small business contract is void if: (a) the term is unfair; and (b) the contract is a standard form contract; and (c) the contract is: (i) a financial product; or (ii) a contract for the supply, or possible supply, of services that are financial services. (2) The contract continues to bind the parties if it is capable of operating without the unfair term. (2A) A person contravenes this subsection if: (a) the person makes a contract; and (b) the contract is a consumer contract or small business contract; and (c) the contract is a standard form contract; and (d) the contract is either a financial product or a contract for the supply, or possible supply, of financial services; and (e) a term of the contract is unfair; and (f) the person proposed the unfair term. (2B) A person who contravenes subsection (2A) commits a separate contravention of that subsection in respect of each term that is unfair and that the person proposed. (2C) A person contravenes this subsection if: (a) the person applies or relies on, or purports to apply or rely on, a term of a contract; and (b) the contract is a consumer contract or small business contract; and (c) the contract is a standard form contract; and (d) the contract is either a financial product or a contract for the supply, or possible supply, of financial services; and (e) the term is unfair. (3) A consumer contract is a contract at least one of the parties to which is an individual whose acquisition of what is supplied under the contract is wholly or predominantly an acquisition for personal, domestic or household use or consumption. (4) A contract is a small business contract if: (a) the upfront price payable under the contract does not exceed $5,000,000; and (b) at least one party to the contract satisfies either or both of the following conditions: (i) the party makes the contract in the course of carrying on a business and at a time when the party employs fewer than 100 persons; (ii) the party’s turnover, worked out under subsection (7) for the party’s last income year (within the meaning of the Income Tax Assessment Act 1997) that ended at or before the time when the contract is made, is less than $10,000,000. (5) For the purposes of paragraph (4)(a), in working out the upfront price payable under a contract under which credit is provided or is to be provided, disregard any interest payable under the contract. (6) In counting for the purposes of subparagraph (4)(b)(i) the number of persons that a person employs: (a) a casual employee is not to be counted unless employed on a regular and systematic basis; and (b) a part‑time employee (including a part‑time casual employee counted under paragraph (a) of this subsection) is to be counted as an appropriate fraction of a full‑time equivalent. (7) For the purposes subparagraph (4)(b)(ii), a party’s turnover for a period is the sum of the values of all supplies the party made during the period, other than the following: (a) supplies that are input taxed; (b) supplies that are not for consideration (and are not taxable supplies under section 72‑5 of the A New Tax System (Goods and Services Tax) Act 1999); (c) supplies that are not made in connection with an enterprise that the party carries on; (d) supplies that are not connected with the indirect tax zone. (8) Expressions used in subsection (7) that are also used in the A New Tax System (Goods and Services Tax) Act 1999 have the same meaning as in that Act. > Note: This section applies to Insurance Contracts Act insurance contracts in addition to the Insurance Contracts Act 1984 (see paragraph 15(2)(d) of that Act).