Unfair Contract Terms: A Quick Guide to Writing Fair Variation Clauses, Summaries of Business

Download Unfair Contract Terms: A Quick Guide to Writing Fair Variation Clauses and more Summaries Business in PDF only on Docsity! Unfair contract terms Changing the terms of a contract (variation clauses) QUICK GUIDE Tips for writing fair terms Your terms are more likely to be fair if: You explain what, when and how a contract may change So your customers can make an informed decision whether to enter the contract in the first place. You give reasonable notice and a right to cancel without cost So your customer can go elsewhere if they are unhappy with the change, without being left worse off. When a business enters into a contract with a customerand there is little or no opportunity for the customer to negotiate the terms then this is likely to be a standard form consumer contract. Under the Fair Trading Act, all the terms in a standard form consumer contract must be fair. Terms that give you the right to change elements of a contract, after it has been agreed with your customer, are known as variation clauses. You might use this type of term to amend a long-term contract if circumstances change. Variation clauses are likely to be unfair if they have the effect of a ‘blank cheque’, allowing you to adjust an agreed price at your discretion, or to change other important aspects of the contract to suit yourself. A term that gives you the right to make changes without the consent of your customer may be unfair, under the Fair Trading Act. The Commerce Commission can take action to stop you using an unfair term in a standard form consumer contract. If a court declares the term to be unfair, then it will not be legally binding on your customer.