Federal Court Rules on Fujifilm Australia’s Unfair Contract Terms

This article aims to briefly examine the Federal Court’s ruling in relation to the unfair contract terms concerning Fujifilm Business Innovation Australia Pty Ltd.

Who commenced the action?

The Australian Competition and Consumer Commission (ACCC) commenced an action against Fujifilm Business Innovation Australia Pty Ltd (Fuji) alleging that between November 2016 and December 2021, Fuji used 21 identifiable template contract forms as a basis for entering into contracts with consumers. The court documents showed that some 34,000 contracts were entered into or renewed using the template contracts.

What was wrong with the contracts?

In summary, the contracts, among other things, “allowed Fuji to Unilaterally vary either the price charged to the customers and/or the rights and obligations between Fuji and the customer”; it incorporated additional contractual terms by reference to one or more extraneous documents, which documents are difficult for the customer to locate or identify, and which Fuji can unilaterally vary with no obligation to give notice of the variation; and more importantly, the contracts limited Fuji’s liability for any delay in supplying or delivering equipment to the customer in circumstances where the customer has no right to be excused from charges payable for the periods of the delay.

What Fuji agreed to do?

Fuji by consent, among other things, agreed to write to all those customers affected stating that the Federal Court of Australia made orders by consent that some of Fuji’s agreements with small business customers contain unfair contract terms, meaning, that those terms are void and cannot be enforced by Fuji if they were in a small business contract. Fuji also was ordered, by consent, to place a corrective notice on its website and further pay a contribution to the applicant’s costs of and incidental to the court proceeding fixed in the amount of $250,000.

The Take-Home message

It is very likely that the court will declare any contractual obligation which creates a significant imbalance between the parties’ rights and obligations as null and void and if that be the case, the terms declared as void cannot be enforced. There are other factors that in any contract interpretation the court will take into account. For instance, the court in interpreting the wording of a contract, will examine the ordinary meaning of that wording and further will see whether the term viewed objectively would make any commercial sense to any reasonable business individual. Therefore, it is important to seek professional legal advice prior to agreeing to any written contract, and preferably prior to its drafting. This may save some time and money for you and prevent you from agreeing to a contract that may disadvantage you.

Full case of Australian Competition and Consumer Commission v Fujifilm Business Innovation Australia Pty Ltd [2022] FCA 928 may be accessed using the following link:

Australian Competition and Consumer Commission v Fujifilm Business Innovation Australia Pty Ltd [2022] FCA 928

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Article Source: Unfair Contract Terms

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