4: Legislation to support the Principle of Unfair Contract to be Unenforceable
Since the amendment made in the Australian Laws after the decision made for CBA v Amadio case in 1983, various legislation and principles have been added to support the contract to be unenforceable for unfair practices. Statute amendment in Trade Practices Act 1974, under section 51AA, 51AB and 51AC supports the principle exhibiting the unfair practices to be considered as unconscionable conduct. Section 20, 21 and 22 of ACL and section 12CA, 12CB and 12CC of ASIC Act 2001 supports the principles that a contract may be regarded as unfair and thus cannot be enforced by the stronger party. In addition, other statutes by the Corporation Act 2001 and Contracts Review Act 1980 support to find out unfair practices and unconscionable characteristics in a contract (Davidson, 2007).
5: Effects on bank when court is reluctant to enforce agreements found unfair or unequal
Judgment given at courts considering agreements to be unfair or unequal has possible effects on banks and other larger institutions. In Australia, there is a common legal principle to pay a sum of money to the innocent party in a contractual term when the other party breaches the agreement. Such events are enforceable in some …show more content…
for which banks charges heavy penalties. As per the part 2B of the Victorian Fair Trading Act 1999, unfair contracts are regarded to be void for direct debit of cheque dishonor fees. In such events, customers don’t have rights to negotiate the term and thereby banks attempt to impose heavy penalty fees, however courts have held their judgment in various cases considering such conducts as unfair and therefore unenforceable. Such judgments and supports in the favor of customers with respect to penalty recover protect customers from misconduct of