Australian Competition & Consumer Commission- MyAssignmenthelp.com

Question: Discuss about theAustralian Competition Consumer Commission for Common Law. Answer: Introduction Unconscionability is doctrine that is traditionally founded on common law contract law principles. It is defined by unreasonable terms in a contract that lead to one party having an unfair bargaining power over another party in the agreement. It takes away the essence of justice, fairness and equity in a contract. It is an innate quality of contract law that parties must an equal bargaining power when they are making an agreement. Ideally, a party will be regarded as a perpetrator of unconscionability if they take advantage of another party because of an inherent weakness in the other party. In Australia uncosionability is regarded as unconscionable conduct and it manifest it self in various forms such as unfair contract principle, misleading and deceptive conduct which are encapsulated in Australia consumer law and contract. Conversely, fraudulent misrepresentation, undue influence and duress are common law principles which can also be defined under the umbrella uncosionability. It is important to note that the major principle that must be evinced to prove uncosionability is inequality of bargaining power test which has been applied in many cases and quoted by reputable judges. The cardinal rule under uncosionability is that an agreement that is found to be unconscionable cannot be enforced and the courts set aside such agreement (Priestley, 1986). The rigidity and harshness of common law cannot be expressed in a better was as it was held in L'Estrange v F Graucob Ltd (1934) that a person is presumed to have read and understood all the terms in an agreement even though this may not be the case once the contract has been signed by both parties. The law that prohibits uncosionability therefore came in to mitigate the harshness of common law by offering protection to weak parties in a contract whose right have ben buried under the ground by the other party. The government body that is charged with the mandate to protect consumers form harsh practices of vendors in Australia, who take advantage of other parties, is the Australia the Australian Competition and Consumer Commission (ACCC). The legislations and principles that explain unconscionable conduct breathe life in Australia legal system so as to protect consumers and parties in a contract. The law also seeks to ensure that products and services that are offered by vendors meet the specification and the required standard of a party in the agreement. Despite the fact that much judicial ink has been spilt on uncosionability principle the leading case in the English common law is Lloyds Bank Ltd v Bundy (1974) where Lord Denning made the celebrated pronouncement on inequality of bargaining power. He stated that to prove that there was inequality of bargain of contract two elements must be shown to exist ,which include a considerable amount of pressure and that there was no reliance on independent advice. To lord denning, if the to elements were satisfied then the obvious reference would be that there was an unfair advantage and parties in the agreement were not equal form the onset. On the other hand in National Westminster Bank plc v Morgan (1985) lord Denning made a controversial ruling to the effect that manifest disadvantage was not vital element that would be applied to establish inequality of bargaining power in an agreement. To the contrary, at the House of Lords Lord Scarman disagreed with Lord Denning by stating that manif est disadvantage is in fact the cornerstone factor that has to be proved to establish inequality of bargaining power in a contract. Australia followed the foot steps of Lord Scarman and established rule that has not fallen off its pedestal since it was enunciated in the leading case of Commercial Bank of Australia Ltd v Amadio (1983). In this case the complainant was an Italian immigrant couple in Australia who went to seek services of a bank. The bank manger new that the Italian couple was not able to understand of or speak English but he took advantage of the fact and entered into an agreement with them and later the couple found themselves to be liable for the contract. The ruling of the court created the special disability test and it held that to prove the concept of uncosionability n an agreement it must be proved that one party had a special disability. The court defined special disability as a circumstance suffered by a party where he cannot make a pragmatic decision on their own because of a peculiar incapacity which the party was aware of but took advantage of the disability to make the agreement in his favor. The advanced the special disability test the court in Louth v Diprose (1992) ruled that even though there is a manifest special disability it must be proved before the court that the exploited that weakness. In broad strokes intoxication, especially when voluntary does not fall within the meaning of special disability. However, the court in Blomley v Ryan (1956) held that it may be held as a special disability if it very severe. From the two leading cases in English common law and Australian law a uniform test of inequality of bargain can be established. Ideally, the necessary elements underpinning unequal bargain include, manifest advantage, special disability, reliance on independent advice and exploitation (Goldring et al., 1998). In a similar vein undue pressure inflicted on another party in an agreement can also add within the bracket of the test. In Australia the section 20 of the Australia consumer law (2010) provides that in any trade of transaction one should not engage in unconscionable conduct. The reasoning behind the legislative prohibition of unconscionable conduct is to ensure that there is market fairness and the consumers are treated justly. It may be argued that Section 18 of the Australia Consumer law which prohibits misleading and deceptive conduct is an extension of meaning of unconscionable conduct. It can be stated that an advertisement that is misleading and is deceptive as was the case in Google Inc. v ACCC (2013) is a conduct that is an unfair disadvantage to the party being misled and thereby the conduct is also unconscionable. Under the Australian Law an unfair contract is an agreement which is on the face of it unjust and one which party enjoys an advantage that the other party. The legislation that outlaws unfair contracts is the Australian Securities and Investments Commission Act 2001 which defines an unfair contract as agreement that contains unreasonable terms that create an imbalance in the contractual rights and duties of parties in an agreement (section12BG ASIC Act). Another legislation that outlaws unfair contract is the Australia Consumer law that gives the court powers to decline to enforce an unfair contract (Australia Consumer Law section 24(1)). The Australian Securities and Investments Commission Act 2001 it extended the definition of unfair contract to financial loss that is caused to a small business by other big and complex forms of business. Unfair contracts occur when a party to an agreement includes implausible terms in an agreement that create an inequality of rights and obligation just like a right to terminate the agreement being left to the sole discretion of one party. The courts in Australia have divulged a timorous reluctance to execute unfair contracts that emanate from banking intuitions and other large corporate or business institutions. Chen-Wishart (2010) suggests that the reason that is that most people who engage in a business with the bank do not absolutely understand the technical characteristics of the services sought. The court therefore has assumed the responsibility of shielding consumers from the inequality of bargain that is blatant because the bank managers of staffs ordinary have more technical knowledge about their services that their clients. Chitty (2012) argues that a customer of a financial product from a bank is denied the chance to sufficiently comprehend all the information that relates to the bank charges before he appends his signature. However, the normative rule is that a party to an agreement is presumed to have read and understood all the terms of an agreement and is aware of all his contractual rights and obligatio ns before the signature is appended. The bank is presumed to be transparent and follows the principle of disclosure when it presents the agreement to the customer. Under Australian law the courts reasoning is consequential because it disregards the fact that there has been transparency bank because of the impact of the unfair contract and not its substantive nature. The banks and other institutions have embarked promoting not ordinary transparency between them and the client but they ensure that the customer understands all facets of the financial product they are seeking (Chen-Wishart, 2010). In response the reluctance demonstrated by the courts, banks and other institution have made more internal regulations to avert any obvious unfairness in their contracts. In this study the commentary that was interesting was dealing with unfair contracts and banks. The underlying argument in the commentary is that utmost good faith is immaterial when establishing the unfairness of contracts of banks (Chen-Wishart, 2010). It shocks ones legal conscience that utmost good faith is primary factor at the pre-contractual stage and after the contract is signed and parties have to perform their obligations. The leading authority that was used is Office of Fair Trading v Abbey National Plc. (2009) insisted that the important factor is the signature because once it has been appended the obvious inference that all know the terms of the agreement. This case did not insist on the significance of utmost good faith. Traditionally, the Financial and Consumer Rights Council Inc (FCRC) is known to be a financial counselor but their mandate is capacious and also includes fostering the rights of consumers in Australia. The FCRC is part of the advocates groups in Australia that directs and offers advices to consumers about legal services in legal actions of unfair contract. They also educate consumers about their rights and obligations under a contract and when faced with an unfair contract. An example of case of unconscionable conduct can be explained by the legal case of Louth v Diprose (1992) in which the vendor told the purchaser that if he does not buy their goods he will commit suicide and the purchaser was forced to agree to the transaction. The court made a ruling which declared the vendor to be liable of unconscionable conduct. Conclusion It is a plausible conclusion that Australia has enforced a strong legal mechanism that prohibits unfair contracts and uncosionability in any financial dealing or trade. However, the special disability rule in Australia remains to be benchmark principle with regard to protecting the rights of the consumers. A polite suggestion that can be withdrawn from this essay is that the idea of good faith and transparency should not be given absolute disregard. References Australian Competition Consumer Commission v Radio Rentals Limited - [2005] FCA 1133 Australian Consumer Law (ACL) Schedule 2 of the Competition and Consumer Act 2010 Australian Securities and Investments Commission Act 2001 (ASIC Act) Blomley v Ryan. (1956) 99 CLR 362 Chen-Wishart, M., 2010. Transparency and Fairness in Bank Charges. Law Quarterly Review Chitty, J., 2012. Chitty on contracts: General principles (Vol. 1). Sweet Maxwell. Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 Goldring, J., Maher, L., McKeough, J. and Pearson, G., 1998. Consumer protection law. Federation Press. Google Inc v ACCC. High Court of Australia [2013] HCA 1 L'Estrange v F Graucob [1934] 2 KB 294 Lloyds Bank Ltd v Bundy [1974] EWCA 8 Louth v Diprose (1992) HCA 61) National Westminster Bank plc v Morgan [1985] UKHL 2 Office of Fair Trading v Abbey National Plc [2009] UKSC 6