Contracts Review Act 1980 No 16
Current version for 4 July 2014 to date (accessed 18 December 2014 at 15:02)
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Current version for 4 July 2014 to date (accessed 18 December 2014 at 15:02).
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Minister for Fair Trading

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An Act with respect to the judicial review of certain contracts and the grant of relief in respect of harsh, oppressive, unconscionable or unjust contracts.

Part 1 Preliminary

1   Name of Act

This Act may be cited as the Contracts Review Act 1980.

2   Commencement

(1)  This section and section 1 shall commence on the date of assent to this Act.
(2)  Except as provided in subsection (1), this Act shall commence on such day as may be appointed by the Governor in respect thereof and as may be notified by proclamation published in the Gazette.

3   (Repealed)

4   Definitions

(1)  In this Act, except in so far as the context or subject-matter otherwise indicates or requires:

Court means:

(a)  the Supreme Court of New South Wales, or
(b)  in accordance with section 134B of the District Court Act 1973, and without affecting the jurisdictional limitations referred to in that section, the District Court of New South Wales, or
(c)  in accordance with section 32 of the Local Court Act 2007, and without affecting the jurisdictional limitations referred to in that section, the Local Court, or
(d)  in accordance with section 89D of the Home Building Act 1989, and without affecting the jurisdictional limitations referred to in that section, the Tribunal, or
(e)  in accordance with section 123 of the Retirement Villages Act 1999, and without affecting the jurisdictional limitations referred to in that section, the Tribunal.

land instrument means an instrument that transfers title to land, creates an estate or interest in land or is a dealing within the meaning of the Real Property Act 1900.

Tribunal means the Civil and Administrative Tribunal.

unjust includes unconscionable, harsh or oppressive, and injustice shall be construed in a corresponding manner.

(2)  A reference in this Act to a corporation does not include a reference to:
(a)  an owners corporation constituted under section 11 of the Strata Schemes Management Act 1996, or
(a1)  a community association, precinct association or neighbourhood association under the Community Land Management Act 1989, or
(b)  a corporation owning an interest in land and having a memorandum or articles of association conferring on owners of shares in the corporation the right to occupy certain parts of a building erected on that land,
all or the majority of which lots or parts, as the case may be, are intended to be occupied as dwellings.
(3)  Notes included in this Act do not form part of this Act.

5   Act binds Crown

This Act binds the Crown not only in right of New South Wales but also, so far as the legislative power of Parliament permits, the Crown in all its other capacities.

6   Certain restrictions on grant of relief

(1)  The Crown, a public or local authority or a corporation may not be granted relief under this Act.
(2)  A person may not be granted relief under this Act in relation to a contract so far as the contract was entered into in the course of or for the purpose of a trade, business or profession carried on by the person or proposed to be carried on by the person, other than a farming undertaking (including, but not limited to, an agricultural, pastoral, horticultural, orcharding or viticultural undertaking) carried on by the person or proposed to be carried on by the person wholly or principally in New South Wales.

Part 2 Relief in respect of unjust contracts

7   Principal relief

(1)  Where the Court finds a contract or a provision of a contract to have been unjust in the circumstances relating to the contract at the time it was made, the Court may, if it considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result, do any one or more of the following:
(a)  it may decide to refuse to enforce any or all of the provisions of the contract,
(b)  it may make an order declaring the contract void, in whole or in part,
(c)  it may make an order varying, in whole or in part, any provision of the contract,
(d)  it may, in relation to a land instrument, make an order for or with respect to requiring the execution of an instrument that:
(i)  varies, or has the effect of varying, the provisions of the land instrument, or
(ii)  terminates or otherwise affects, or has the effect of terminating or otherwise affecting, the operation or effect of the land instrument.
(2)  Where the Court makes an order under subsection (1) (b) or (c), the declaration or variation shall have effect as from the time when the contract was made or (as to the whole or any part or parts of the contract) from some other time or times as specified in the order.
(3)  The operation of this section is subject to the provisions of section 19.

8   Ancillary relief

Schedule 1 has effect with respect to the ancillary relief that may be granted by the Court in relation to an application for relief under this Act.

9   Matters to be considered by Court

(1)  In determining whether a contract or a provision of a contract is unjust in the circumstances relating to the contract at the time it was made, the Court shall have regard to the public interest and to all the circumstances of the case, including such consequences or results as those arising in the event of:
(a)  compliance with any or all of the provisions of the contract, or
(b)  non-compliance with, or contravention of, any or all of the provisions of the contract.
(2)  Without in any way affecting the generality of subsection (1), the matters to which the Court shall have regard shall, to the extent that they are relevant to the circumstances, include the following:
(a)  whether or not there was any material inequality in bargaining power between the parties to the contract,
(b)  whether or not prior to or at the time the contract was made its provisions were the subject of negotiation,
(c)  whether or not it was reasonably practicable for the party seeking relief under this Act to negotiate for the alteration of or to reject any of the provisions of the contract,
(d)  whether or not any provisions of the contract impose conditions which are unreasonably difficult to comply with or not reasonably necessary for the protection of the legitimate interests of any party to the contract,
(e)  whether or not:
(i)  any party to the contract (other than a corporation) was not reasonably able to protect his or her interests, or
(ii)  any person who represented any of the parties to the contract was not reasonably able to protect the interests of any party whom he or she represented,
because of his or her age or the state of his or her physical or mental capacity,
(f)  the relative economic circumstances, educational background and literacy of:
(i)  the parties to the contract (other than a corporation), and
(ii)  any person who represented any of the parties to the contract,
(g)  where the contract is wholly or partly in writing, the physical form of the contract, and the intelligibility of the language in which it is expressed,
(h)  whether or not and when independent legal or other expert advice was obtained by the party seeking relief under this Act,
(i)  the extent (if any) to which the provisions of the contract and their legal and practical effect were accurately explained by any person to the party seeking relief under this Act, and whether or not that party understood the provisions and their effect,
(j)  whether any undue influence, unfair pressure or unfair tactics were exerted on or used against the party seeking relief under this Act:
(i)  by any other party to the contract,
(ii)  by any person acting or appearing or purporting to act for or on behalf of any other party to the contract, or
(iii)  by any person to the knowledge (at the time the contract was made) of any other party to the contract or of any person acting or appearing or purporting to act for or on behalf of any other party to the contract,
(k)  the conduct of the parties to the proceedings in relation to similar contracts or courses of dealing to which any of them has been a party, and
(l)  the commercial or other setting, purpose and effect of the contract.
(3)  For the purposes of subsection (2), a person shall be deemed to have represented a party to a contract if the person represented the party, or assisted the party to a significant degree, in negotiations prior to or at the time the contract was made.
(4)  In determining whether a contract or a provision of a contract is unjust, the Court shall not have regard to any injustice arising from circumstances that were not reasonably foreseeable at the time the contract was made.
(5)  In determining whether it is just to grant relief in respect of a contract or a provision of a contract that is found to be unjust, the Court may have regard to the conduct of the parties to the proceedings in relation to the performance of the contract since it was made.

10   General orders

Where the Supreme Court is satisfied, on the application of the Minister or the Attorney General, or both, that a person has embarked, or is likely to embark, on a course of conduct leading to the formation of unjust contracts, it may, by order, prescribe or otherwise restrict, the terms upon which that person may enter into contracts of a specified class.

Part 3 Procedural and other matters

11   Application for relief

(1)  The Court may exercise its powers under this Act in relation to a contract on application made to it in accordance with rules of court, whether in:
(a)  proceedings commenced under subsection (2) in relation to the contract, or
(b)  other proceedings arising out of or in relation to the contract.
(2)  Proceedings may be commenced in the Court for the purpose of obtaining relief under this Act in relation to a contract.

12   Interests of non-parties to contract

(1)  Where in proceedings for relief under this Act in relation to a contract it appears to the Court that a person who is not a party to the contract has shared in, or is entitled to share in, benefits derived or to be derived from the contract, it may make such orders against or in favour of that person as may be just in the circumstances.
(2)  The Court shall not exercise its powers under this Act in relation to a contract unless it is satisfied:
(a)  that the exercise of those powers would not prejudice the rights of a person who is not a party to the contract, or
(b)  that, if any such rights would be so prejudiced, it would not be unjust in all the circumstances to exercise those powers,
but this subsection does not apply in relation to such a person if the Court has given the person an opportunity to appear and be heard in the proceedings.

13   Intervention

The Minister or the Attorney General, or both, may, at any stage of any proceedings in which relief under this Act is sought, intervene by an Australian legal practitioner or agent, and shall thereupon become a party or parties to the proceedings and have all the rights of a party or parties to those proceedings in the Court, including any right of appeal arising in relation to those proceedings.

14   Fully executed contracts

The Court may grant relief in accordance with this Act in relation to a contract notwithstanding that the contract has been fully executed.

15   Arrangements

In any proceedings in which relief under this Act is sought in relation to a contract, the Court may, if it thinks it proper to do so in the circumstances of the case, and it is of the opinion that the contract forms part of an arrangement consisting of an inter-related combination or series of contracts, have regard to any or all of those contracts and the arrangement constituted by them.

16   Time for making applications for relief

An application for relief under this Act in relation to a contract may be made only during any of the following periods:
(a)  the period of 2 years after the date on which the contract was made,
(b)  the period of 3 months before or 2 years after the time for the exercise or performance of any power or obligation under, or the occurrence of any activity contemplated by, the contract, and
(c)  the period of the pendency of maintainable proceedings arising out of or in relation to the contract, being proceedings (including cross-claims, whether in the nature of set-off, cross-action or otherwise) that are pending against the party seeking relief under this Act.

Part 4 Miscellaneous

17   Effect of this Act not limited by agreements etc

(1)  A person is not competent to waive his or her rights under this Act, and any provision of a contract is void to the extent that:
(a)  it purports to exclude, restrict or modify the application of this Act to the contract, or
(b)  it would, but for this subsection, have the effect of excluding, restricting or modifying the application of this Act to the contract.
(2)  A person is not prevented from seeking relief under this Act by:
(a)  any acknowledgment, statement or representation, or
(b)  any affirmation of the contract or any action taken with a view to performing any obligation arising under the contract.
(3)  This Act applies to and in relation to a contract only if:
(a)  the law of the State is the proper law of the contract,
(b)  the proper law of the contract would, but for a term that it should be the law of some other place or a term to the like effect, be the law of the State, or
(c)  the proper law of the contract would, but for a term that purports to substitute, or has the effect of substituting, provisions of the law of some other place for all or any of the provisions of this Act, be the law of the State.
(4)  This Act does not apply to a contract under which a person agrees to withdraw, or not to prosecute, a claim for relief under this Act if:
(a)  the contract is a genuine compromise of the claim, and
(b)  the claim was asserted before the making of the contract.
(5)  Without affecting the generality of subsection (1), the Court may exercise its powers under this Act in relation to a contract notwithstanding that the contract itself provides:
(a)  that disputes or claims arising out of, or in relation to, the contract are to be referred to arbitration, or
(b)  that legal proceedings arising out of, or in relation to, the contract are justiciable only by the courts of some other place.

18   Offence

(1)  Where a person submits a document:
(a)  that is intended to constitute a written contract,
(b)  that has been prepared or procured by the person or on the person’s behalf, and
(c)  that includes a provision that purports to exclude, restrict or modify the application of this Act to the document,
to another person for signature by that other person, the person submitting the document is guilty of an offence and liable to a penalty not exceeding 20 penalty units.
(2)  Proceedings for an offence against subsection (1) shall be disposed of summarily before the Local Court and may be commenced at any time within 2 years after the offence was committed.

19   Orders affecting land

(1)  An order made under section 7 (1) (b) or (c) has no effect in relation to a contract so far as the contract is constituted by a land instrument that is registered under the Real Property Act 1900.
(2)  Where an order is made under section 7 (1) (b) or (c) in relation to a contract constituted (in whole or in part) by a land instrument, not being a land instrument registered under the Real Property Act 1900, the regulations made under this Act may make provision for or with respect to prescribing the things that must be done before the order, so far as it relates to the land instrument, takes effect.
(3)  The Registrar-General and any other person are hereby authorised to do any things respectively required of them pursuant to subsection (2).

20   Stamp duty

(1)  No duty is payable under the Duties Act 1997 in respect of:
(a)  an instrument executed pursuant to an order under section 7 (1) (d), or
(b)  a disposition of property made pursuant to an order under clause 1 of Schedule 1.
(2)  Where the Court makes an order under section 7 in relation to a contract, it may order the refund of the whole or any part of the duty paid under the Duties Act 1997 in respect of the contract or any instrument executed consequent on the execution of the contract, and any amount to be so refunded shall be payable by the Treasurer from money provided by Parliament.

21   Application of Act to certain contracts of service and to existing contracts

(1)  This Act does not apply to a contract of service to the extent that it includes provisions that are in conformity with an award that is applicable in the circumstances.
(2)  In subsection (1), award means a State industrial instrument, or an award, instrument or agreement (whatever called) that is in effect under a law of the Commonwealth and deals with matters relating to conditions of employment, industrial relations or workplace relations that are similar to matters dealt with in State industrial instruments.
(3)  Schedule 2 has effect.

22   Operation of other laws

Nothing in this Act limits or restricts the operation of any other law providing for relief against unjust contracts or unfair contract terms, but the operation of any other such law in relation to a contract shall not be taken to limit or restrict the application of this Act to the contract.
Note. Part 2-3 of the Australian Consumer Law (NSW) makes provision in relation to unfair contract terms.

23   Regulations

(1)  The Governor may make regulations, not inconsistent with this Act, for or with respect to any matter that by this Act is required or permitted to be prescribed or that is necessary or convenient to be prescribed for carrying out or giving effect to this Act.
(2)  A provision of a regulation may:
(a)  apply generally or be limited in its application by reference to specified exceptions or factors, or
(b)  apply differently according to different factors of a specified kind,
or may do any combination of those things.

Schedule 1 Ancillary relief

(Section 8)

1   Where the Court makes a decision or order under section 7, it may also make such orders as may be just in the circumstances for or with respect to any consequential or related matter, including orders for or with respect to:

(a)  the making of any disposition of property,
(b)  the payment of money (whether or not by way of compensation) to a party to the contract,
(c)  the compensation of a person who is not a party to the contract and whose interest might otherwise be prejudiced by a decision or order under this Act,
(d)  the supply or repair of goods,
(e)  the supply of services,
(f)  the sale or other realisation of property,
(g)  the disposal of the proceeds of sale or other realisation of property,
(h)  the creation of a charge on property in favour of any person,
(i)  the enforcement of a charge so created,
(j)  the appointment and regulation of the proceedings of a receiver of property, and
(k)  the rescission or variation of any order of the Court under this clause,
and such orders in connection with the proceedings as may be just in the circumstances.

2   The Court may make orders under this Schedule on such terms and conditions (if any) as the Court thinks fit.

3   Nothing in section 6 limits the powers of the Court under this Schedule.

4   In this Schedule:

disposition of property includes:

(a)  a conveyance, transfer, assignment, appointment, settlement, mortgage, delivery, payment, lease, bailment, reconveyance or discharge of mortgage,
(b)  the creation of a trust,
(c)  the release or surrender of any property, and
(d)  the grant of a power in respect of property,
whether having effect at law or in equity.

property includes real and personal property and any estate or interest in property real or personal, and money, and any debt, and any cause of action for damages (including damages for personal injury), and any other chose in action, and any other right or interest.

Schedule 2 Existing contracts

(Section 21 (3))

1   Subject to clause 2, this Act does not apply in respect of a contract made before the commencement of this Schedule.

2   Where the provisions of a contract made before the commencement of this Schedule are varied after that commencement, this Act applies in respect of the contract, but:

(a)  no order shall be made under this Act affecting the operation of the contract before the date of the variation, and
(b)  the Court shall have regard only to injustice attributable to the variation.

Historical notes

The following abbreviations are used in the Historical notes:

Am

amended

LW

legislation website

Sch

Schedule

Cl

clause

No

number

Schs

Schedules

Cll

clauses

p

page

Sec

section

Div

Division

pp

pages

Secs

sections

Divs

Divisions

Reg

Regulation

Subdiv

Subdivision

GG

Government Gazette

Regs

Regulations

Subdivs

Subdivisions

Ins

inserted

Rep

repealed

Subst

substituted

Table of amending instruments

Contracts Review Act 1980 No 16. Assented to 15.4.1980. Date of commencement, 24.4.1980, sec 2 (2) and GG No 66 of 24.4.1980, p 2036. This Act has been amended as follows:

1986

No 220

Miscellaneous Acts (Leasehold Strata Schemes) Amendment Act 1986. Assented to 23.12.1986.
Date of commencement of Sch 1, 1.3.1989, sec 2 (2) and GG No 21 of 10.2.1989, p 911.

1993

No 47

Statute Law (Penalties) Act 1993. Assented to 15.6.1993.
Date of commencement, assent, Sch 1.

 

No 80

Courts Legislation (Amendment) Act 1993. Assented to 24.11.1993.
Date of commencement of Sch 3, assent, Sch 3.

1996

No 121

Statute Law (Miscellaneous Provisions) Act (No 2) 1996. Assented to 3.12.1996.
Date of commencement of Sch 3, 3 months after assent, sec 2 (3); date of commencement of Sch 4.13, 4 months after assent, sec 2 (4).

 

No 122

Building Services Corporation Legislation Amendment Act 1996. Assented to 3.12.1996.
Date of commencement, 1.5.1997, sec 2 and GG No 43 of 24.4.1997, p 2171.

 

No 139

Strata Schemes Management (Miscellaneous Amendments) Act 1996. Assented to 16.12.1996.
Date of commencement, 1.7.1997, sec 2 and GG No 68 of 27.6.1997, p 4770.

1999

No 31

Statute Law (Miscellaneous Provisions) Act 1999. Assented to 7.7.1999.
Date of commencement of Sch 1.10, 1.3.1999, Sch 1.10; date of commencement of Schs 4 and 5, assent, sec 2 (1).

 

No 81

Retirement Villages Act 1999. Assented to 3.12.1999.
Date of commencement of Sch 3.1, 1.7.2000, sec 2 (1) and GG No 62 of 26.5.2000, p 4246.

2001

No 82

Consumer, Trader and Tenancy Tribunal Act 2001. Assented to 21.11.2001.
Date of commencement of Sch 7.4, 25.2.2002, sec 2 (1) and GG No 48 of 22.2.2002, p 901.

 

No 121

Justices Legislation Repeal and Amendment Act 2001. Assented to 19.12.2001.
Date of commencement of Sch 2, 7.7.2003, sec 2 and GG No 104 of 27.6.2003, p 5978.

2005

No 28

Civil Procedure Act 2005. Assented to 1.6.2005.
Date of commencement of Sch 5.8, 15.8.2005, sec 2 (1) and GG No 100 of 10.8.2005, p 4205.

 

No 98

Statute Law (Miscellaneous Provisions) Act (No 2) 2005. Assented to 24.11.2005.
Date of commencement of Sch 3, assent, sec 2 (2).

2007

No 94

Miscellaneous Acts (Local Court) Amendment Act 2007. Assented to 13.12.2007.
Date of commencement of Schs 1.18 and 2, 6.7.2009, sec 2 and 2009 (314) LW 3.7.2009.

2010

No 51

Fair Trading Amendment (Unfair Contract Terms) Act 2010. Assented to 28.6.2010.
Date of commencement, 1.7.2010, sec 2 and 2010 (321) LW 1.7.2010.

 

No 107

Fair Trading Amendment (Australian Consumer Law) Act 2010. Assented to 29.11.2010.
Date of commencement, 1.1.2011, sec 2.

2013

No 95

Civil and Administrative Legislation (Repeal and Amendment) Act 2013. Assented to 20.11.2013.
Date of commencement, 1.1.2014, sec 2.

2014

No 33

Statute Law (Miscellaneous Provisions) Act 2014. Assented to 24.6.2014.
Date of commencement of Sch 1.5, 4.7.2014, sec 2 (1).

Table of amendments

No reference is made to certain amendments made by Schedule 3 (amendments replacing gender-specific language) to the Statute Law (Miscellaneous Provisions) Act (No 2) 1996.

Sec 3

Rep 1999 No 31, Sch 5.20.

Sec 4

Am 1986 No 220, Sch 1; 1993 No 80, Sch 3; 1996 No 122, Sch 7.1; 1996 No 139, Sch 2.7; 1999 No 31, Sch 1.10 [1] [2]; 1999 No 81, Sch 3.1; 2001 No 82, Sch 7.4 [1] [2]; 2005 No 28, Sch 5.8; 2007 No 94, Sch 1.18; 2010 No 51, Sch 2 [1]; 2013 No 95, Sch 4.9; 2014 No 33, Sch 1.5 [1].

Sec 13

Am 2005 No 98, Sch 3.12.

Sec 18

Am 1993 No 47, Sch 1; 1999 No 31, Sch 4.16; 2001 No 121, Sch 2.60; 2007 No 94, Sch 2.

Sec 20

Am 2014 No 33, Sch 1.5 [2].

Sec 21

Am 1996 No 121, Sch 4.13; 2014 No 33, Sch 1.5 [3].

Sec 22

Am 2010 No 51, Sch 2 [2] [3]; 2010 No 107, Sch 3.5.

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