Articles > Contracts

What is Unconscionable Conduct?

February 21, 2022   Philip Evangelou

Unconscionable conduct is behaviour that is more than simply unfair and goes so against good conscience. Under section 21 of the Competition and Consumer Act 2010 (Cth) (‘CCA’), it is illegal for businesses to engage in unconscionable conduct in the course of trade and sales. Whilst there is no current legal definition of unconscionable conduct, we can examine case law to help define boundaries of unconscionable conduct. 

How is Unconscionable Conduct Determined?

Section 22 of the CCA provides guidance on the factors the Court will examine in determining whether the supplier has engaged in unconscionable conduct. These include:

  • The relative strengths of the bargaining positions of the supplier and the customer
  • Whether the customer was able to understand the documents in relation to the supply or possible supply of goods and services
  • Whether undue influence was exerted
  • Whether the customer had to comply with ridiculous conditions stipulated by the supplier
  • Whether both the parties acted in good faith
  • Industry code requirements
  • The extent to which the supplier was willing to renegotiate
  • How consistent and similar the supplier’s behaviour was in other similar transactions 

Under common law principles, the Court will determine the existence of unconscionable conduct if the supplier is aware and exploits a special disadvantage or vulnerability of the customer. 

Remedies for Unconscionable Conduct

If the Court determines the presence of unconscionable conduct, the Court can enforce penalties such as:

  • Financial penalties
  • Voiding a contract
  • Specific performance of services
  • Refund 

If you would like further information or advice on unconscionable conduct, please reach out to us through the contact form or by calling us on 1300 377 997. 

About Philip Evangelou

phillipPhil is a director at OpenLegal. He has over 16 years experience working in private practice and in-house counsel in Sydney and London, giving him expertise in employment law, IP, finance, leases, dispute resolution, insurance and contracts.