E-Alert: Risk of lease terms being unfair and unenforceable

The Federal Court’s declaration in the recent case of Australian Competition and Consumer Commission (ACCC) v Servcorp Limited [2018] FCA 1044 that certain terms in office rental contracts were unfair and void is a warning for all landlords whose leases (or other forms of rental agreements) fall under the consumer unfair contract terms regime imposed by the Australian Consumer Law (ACL) in Schedule 2 of the Competition and Consumer Act 2010  (Cth).

Servcorp Limited and two of its subsidiaries (Servcorp) provided serviced office spaces and virtual office services to customers.  The ACCC commenced formal action against Servcorp claiming that certain terms in Servcorp’s standard contract were unfair and void under the ACL.