What you must do when entering into an 'Unsolicited Consumer Agreement'

If you enter into an unsolicited consumer agreement with a customer (consumer), the Australian Consumer Law imposes added obligations. 

An unsolicited consumer agreement is generally established if these factors are met: 

  • The agreement is for the supply of goods or services to a consumer;
  • The agreement is the result of negotiations between the supplier of the goods or services and consumer; 
  • The consumer did not invite the supplier to visit them or make a telephone call, to engage in negotiations for the supply of goods or services; and
  • There is no defined price when the agreement is made, or the price exceeds $100. 

If an unsolicited consumer agreement has been formed, the supplier of the goods or services must comply with sections 79 and 80 of the Australian Consumer Law. Such obligations include, but are not limited to:

  • There must be a written agreement outlining the relevant terms;
  • This agreement must be signed by the consumer.  

Further, on the front page of this agreement, the following must be clearly displayed:

  • The text ‘Important Notice to the Consumer’;
  • The text ‘You have a right to cancel this agreement within 10 business days from and including the day after you signed or received this agreement’; and
  • The text ‘Details about your additional rights to cancel this agreement are set out in the information attached to this agreement’.

Failure to comply with the above and any part of sections 79 and 80 of the Australian Consumer Law, can expose sole traders to a fine of up to $10,000 and companies to a fine of up to $50,000.

Disclaimer: This summary is a guide only and is not legal advice. For further information on the Australian Consumer Law, call NECA Legal (WA) Pty Ltd on (08) 6241 6129 or email necalegalwa@ecawa.org.au.