Fowler Homes Pty Ltd - variation - s.87B Undertaking

On 13 December 2022, the Australian Competition and Consumer Commission (ACCC) accepted a court enforceable undertaking from Fowler Homes Pty Ltd (Fowler Homes) in relation to unfair contract terms in its standard home building contract (the Fowler Homes Contract).   

Since around May 2017, the Fowler Homes Contract included a clause titled ‘Confidentiality of Contract’. Under this clause, Fowler Homes included terms (among other things) that in effect:

• prohibited its customers from disclosing or publishing feedback, including negative feedback relating to Fowler Homes’ services or contract;
• required customers to obtain permission from Fowler Homes in order to make any public statements about the contract, including the services they received from Fowler Homes; and
• required customers to indemnify Fowler Homes for costs incurred by Fowler Homes in protecting its rights if the customer breached this clause

(together the Non-disparagement Term).

Fowler Homes has admitted that the Non-disparagement Term was unfair within the meaning of section 24 of the Australian Consumer Law (ACL), contained in Schedule 2 of the Competition and Consumer Act 2010 and was void under section 23 of the ACL.

Fowler Homes has provided the ACCC with a section 87B Undertaking in which it undertakes to:

• not enforce or rely upon the Non-disparagement Term, or terms with the same effect, for all customers that have already entered into a Fowler Homes Contract that includes the Non-disparagement Term or terms with the same effect
• ensure future Fowler Homes Contracts do not include the Non-disparagement Term, or terms with the same effect
• send a corrective letter to relevant customers who entered into a Fowler Homes Contract between 1 July 2019 and 25 August 2022  
• establish and implement a complaints handling system and compliance program.

Variation to the Undertaking

On 20 December 2022, the ACCC accepted a variation to the section 87B Undertaking provided to the ACCC by Fowler Homes Pty Ltd. The purpose of this Variation to the Undertaking is to update details about the standard home building contract which is specified in the Undertaking and to extend the time for compliance with paragraph 4.3 of the Undertaking and paragraph 1 of Attachment B to the Undertaking (the ACL Compliance Program)