Recently one of our clients brought in a copy of a “Quote” she had signed that was causing her some concern. We were also concerned by the document, particularly when we read the back page terms and conditions that not only noted that the “Quote” would not bind the seller (and therefore was not a valid quote), but the buyer also agreed to mortgage all her real property!

Of course this would not create a registrable mortgage, but it is easy to see how some people may find a document like this intimidating, especially if the seller sought to enforce it later.

From 17 March 2015, unfair standard contract terms like this will be subject to strict sanctions under the Fair Trading Act. Once a term is declared unfair, any trader who tries to enforce or rely on that term will be liable to a fine on conviction of up to $200,000 for an individual, or up to $600,000 for a body corporate.

The “Quote” provided in this example likely already breaches aspects of the Fair Trading Act in that it is a misleading document. A quote is supposed to provide the customer with a firm price, so that they know what they are entering into.

In some cases it is quite difficult to know whether companies using documents like this “Quote” really mean to mislead their customers, or whether they have just printed some standard contact off from the internet that “looks legal”.

We encourage all businesses supplying goods or services in trade to actually read their standard contracts before they use them. As a general rule of thumb, if you can’t understand your terms of trade, then your customers won’t be able to either.