Unconscionable conduct by commercial landlords is a growing cause for concern among small businesses, particularly retail tenants.
The Australian Competition and Consumer Commission has reacted strongly to complaints from small businesses and recent enforcement actions are detailed in the latest issue of the ACCC Journal.
Unconscionable conduct generally occurs when a stronger company takes unfair advantage of a weaker business that it is dealing with. It is more than driving a hard bargain; it is using market power to force unreasonable conditions on the smaller party.
Unconscionable conduct can occur when contracts are up for renewal with unreasonably harsh conditions laid down on a 'take it or leave it' basis. This can result in eviction, heavy financial losses and personal anguish.
In the Farrington Fayre case, a landlord used his bargaining power to extract a benefit from a tenant that was irrelevant to their lease agreement.
The landmark judgment in the Simply No Knead case extended the meaning of unconscionable conduct to include such actions as authorising infringement on franchise territories, omitting the names of franchisees on advertising material, and refusing requests to negotiate.
The case against LeeLee also dealt, among other things, with the infringement of franchise rights. The ACCC obtained injunctions against the landlord preventing future unconscionable conduct. You can read about all these cases in issue 32 of the ACCC Journal.
The ACCC's latest Competing Fairly Forum, May 2001, focussed on unconscionable conduct. The Forum linked almost 70 regional towns across Australia and featured an expert panel, headed by the ACCC Chairman, Professor Allan Fels, discussing key factors of unconscionable conduct, recent court decisions and answering viewer questions. Read more about the Forum and how to obtain the video in this issue of the ACCC Journal.
Issue 32 of the ACCC Journal also contains information on the ACCC's role in enforcing product safety standards and a detailed analysis of the national electricity market in Australia, including possible lessons from the Californian energy crisis.
To subscribe to the ACCC Journal please contact Robert Booth on (02) 6243 1143 or email robert.booth@accc.gov.au