From 9 November 2023, there will be changes to the law regarding the use, proposal or reliance of unfair contract terms (UCT) in standard form contracts. UCTs will become illegal.
Importance for Licensed Motor Car Traders?
It is important for Licensed Motor Car Traders (LMCT) to note that an UCT in a standard form contract can attract significant penalties under the Competition and Consumer Act 2010 (Cth) (CCA) or the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act).
LMCTs use standard form contracts (i.e. VACC Agreements for Sale of New and Used Motor Cars) when retailing vehicles to consumers.
What is a standard form contract?
VACC legal advisor, HWL Ebsworth Lawyers, advises that a standard form contract is generally understood as a set of standard terms and conditions that are issued on a repetitive basis to multiple people, for example, a gym membership application form or the terms and conditions governing an electricity service. These types of agreements can be contrasted with agreements that are often heavily negotiated, such as a business sale agreement or a complex commercial lease.
On this basis, the VACC Agreements for Sale of New and Used Motor Cars are considered standard form contracts. This means that the UCT regime will apply to an agreement/contract of sale in the following scenarios:
- standard form contract made or renewed on or after 9 November 2023.
- a term of a contract that is varied or added on or after 9 November 2023.
Changes to the VACC Agreements for Sale of New and Used Motor Cars
In preparation for the new UCT laws taking effect from 9 November 2023, VACC has referred our New and Used Motor Vehicle Sales Agreements to HWL Ebsworth Lawyers for a comprehensive review to ensure they remain industry best practice. That review resulted in substantial changes to the terms and conditions, as well as the commercial statements. See a summary of some of the changes here.
When will the new version of contracts be available for member purchase?
- For those using the VACC Agreements for Sale of New and Used Motor Cars under licence from VACC, the new version electronic agreements will be available by 2 November 2023.
If a member intends to purchase a licensed digital version of the Agreements of Sale, they should contact VACC’s Daniel Ellul via dellul@vacc.com.au
- For those VACC members using the manual version VACC Agreements for Sale of New and Used Motor Cars, you can pre-order the new version agreements from 2 November 2023.
If a member wants to pre-order the paper-based Agreements of Sale, order online at www.ourautoistore.com.au. Pre-orders will not be open until 2 November 2023.
Disclosure Notices for both electronic and manual forms will be emailed only as separate PDFs for you to print as required.
Delivery of the manual form VACC Agreements for Sale of New and Used Motor Cars will commence at the first opportunity suppliers can arrange, we understand the urgency of having these to you by 9 November, if not soon after.
There will be a price increase for both the manual agreements and electronic versions.
Use of VACC Intellectual Property
The VACC Agreements for Sale of New and Used Motor Cars are the Intellectual Property of VACC and are protected under Federal Legislation and common law rights. They are for the express use of VACC members only, unless otherwise expressly agreed to by VACC.
VACC is particularly alert to Dealer Management Systems providers and outside suppliers of LMCT forms using VACC IP without entering into a licensing agreement with VACC and will monitor the market for potential breaches of its IP.