Retirement village contracts to become the ‘standard form contracts’

At the RVA WA conference Duncan Mackay, Director, Legislation and Policy for the Department of Commerce, reviewed the effect of the new Consumer and Competition Act created under the COAG agreement. (COAG refers to the separate State governments passing legislation responsibility to the Commonwealth for affairs that cross borders and can be standardised nationally). The ‘standard form contract’ will commence on 1 January 2011. The Consumer Affairs Act and the Fair Trading Act will be replaced by Australian Consumer Law.

Mackay detailed that the ‘standard form contract’ will affect the retirement village industry dramatically in that the guiding principles will be:
• the relative bargaining power of parties
• the ability of both parties to negotiate all terms of the contract.

Contracts will be deemed unfair if:
• there is a significant imbalance of rights and obligations
• one party avoids performance
• one party can unilaterally vary terms
• one party can impose penalties on the other party exclusively