Avoiding the void: arbitration clauses in Australian standard form consumer contracts

International Arbitration Newsletter

  • William Doyle

Consumer contracts in the 21st century frequently contain arbitration clauses. Online sellers, transport service providers, telephone companies, social media websites and even dating apps are all requiring consumers to sign up to arbitration for resolution of disputes as part of their service contract. While such clauses provide legal stability and certainty for businesses, consumers can face a significant hurdle in accessing legal recourse. This is particularly the case where foreign entities bind Australian consumers through terms of service that require arbitration overseas. There is potential for such arbitration agreements to be considered void under the Australian Consumer Law's unfair contract provisions and therefore unenforceable, which can leave entities exposed to the legal action they originally sought protection from.