Standard terms in contracts held to be unfair…

The High Court has held that standard terms in contracts of Home Direct Ltd are unfair and therefore unable to be enforced.  Home Direct Ltd sells goods direct to customers online, over the phone and via mobile shops.

Home Direct operated a “voucher entitlement scheme” under which customers who had paid off the amounts owing for goods purchased would continue to be debited further amounts from their bank account.  This could go on indefinitely.  Under the scheme they were not entitled to any refunds of the extra debited amounts and the vouchers that they gained would expire after 12 months.

The High Court held that these terms were unfair and they provided no benefit to consumers.  It was therefore ordered that the terms not be used by any business and the terms cannot be enforced by any business. 

Customers were entitled to get refunds for any vouchers under the scheme from this business and from any other business using the same terms and conditions in relation to no refunds and expiry of vouchers.

The High Court said that Home Direct Ltd had forfeited from its customers $644,000 worth of vouchers.  Those customers will be entitled to refunds from Home Direct Ltd.

The Commerce Commission will be publicising this decision and hopefully that will include assistance to consumers to recover their refunds.




Alan Knowsley