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ARTICLE · 05 OCTOBER 2022

Excessive security? - Risks in using an all assets charging clause in standard form contracts

Bartier Perry Solicitors
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A security in a standard form supply contract was found to be unfair, and so was void and unenforceable under the ACL.

AustraliaConsumer Protection
Maja Samardzic (Formerly With Bartier Perry)
Maja Samardzic (Formerly With Bartier Perry)
Michael Cossetto
Michael Cossetto
Oliver Shtein
Oliver Shtein
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General charging clauses are often included by suppliers in their standard terms and conditions to protect against non-payment.

But in a recent decision by the Federal Court, a security granted under a standard form supply contract was found to be unfair, and therefore void and unenforceable under the Australian Consumer Law (ACL).

Many suppliers may be alarmed to learn that having made a decision to supply goods or services on credit, it may be in the hands of the Courts to say whether they had 'excessive' security.

In this article, we consider the impact that this recent Federal Court decision will have on general charging clauses in standard terms and conditions and we outline some steps that suppliers should take to ensure their standard terms and conditions are fit for purpose.

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