As a service professional, your clients have certain rights under Australian consumer law. Consumer law gives your clients the right to a certain standard of service that you are obliged to meet. This article will unpack key consumer law duties as a service professional in the course of delivering your services. It will also explore how consumer law regulates the written contracts between you and your clients.
Due Care and Skill
As a service provider, you have to take the appropriate level of care and skill when providing your services. The required standard is that you take at least the same care and apply the same level of skill as a competent service provider of your kind with average skills. For example, an accountant contracted to review financial statements by a client must review the statements at least as skillfully and carefully as the average accountant.
Fit for a Particular Purpose
Where a client has engaged you to provide a service for a particular purpose, you must only provide services that serve that purpose. You cannot charge for unrelated services that cannot link back to the purpose that you have been engaged to serve. For example, a lawyer employed by a client to review documents for a property dispute cannot charge the client for time spent researching and reviewing unrelated criminal law matters.
Continue reading this article below the formReasonable Period of Time
If you and the client have not specified a timeframe for you to deliver your services within, you still have a duty to deliver your services within a reasonable period of time. What is reasonable depends on the nature of the services you provide.
Contracts as a Service Professional
Consumer law also regulates what you can include in contracts between you and your clients. In consumer law, a contract can include the following:
- a written contract;
- verbal agreements between you and your client stating that they will engage your services; or
- your client clicking an ‘I agree’ button on your website.
Removing Consumer Rights in Contracts
You might include terms in your contracts requiring clients to waive their rights under consumer law. However, these rights still exist no matter what your contract says. In fact, a court would likely consider those terms that override consumer law to be void. In other words, you cannot waive consumer rights or sidestep your obligations under consumer law by way of a contract.
For example, a contract term that states that a client has no right to request a refund or compensation if services are not up to the appropriate standard of care and skill would not affect the client’s right to proper care and skill.
Client’s Right to End a Contract
Clients have the right under consumer law to end their contracts in certain circumstances. The relevant circumstances generally involve the client being misled or consumer law being violated. Such circumstances include:
- where a service provider has made false or misleading claims about the services they provide. This could include an accountant claiming they are a CPA when they are not, or a lawyer claiming their conveyancing services are superior due to their years of experience when they have never practised in that area; or
- where the consumer law has been violated in the course of the service being provided. For example, a client could end their contract with an architect who has taken far longer than reasonable to complete the blueprints for their house.
Unfair Contract Terms
Consumer law prevents businesses from using unfair contract terms in their standard form contracts. A standard form contract is one in which you do not negotiate the terms, and the customer must simply accept most of the contract terms.
An example of a potentially unfair term would be a clause in your contract that states you have the power to increase the price of your services whenever you choose, and your client is locked into the contract for a number of years and must continue paying you no matter what.
Remember, only a court can decide that a contract term is unfair. To be safe, try to ensure your contracts generally do not cause any terms that would harm your client or give you a disproportionate advantage.
Whether you’re a small business owner or the Chief Financial Officer of an ASX-listed company, one fact remains: your customers need to pay you.
This manual aims to help business owners, financial controllers and credit managers best manage and recover their debt.
Key Takeaways
As a service professional, you must ensure your services align with consumer law requirements. In particular, exercise the required standard of care and skill when providing your services. Your services must also fit the service your client has engaged you to serve, and you must perform it within a reasonable timeframe.
If you need help meeting your consumer law obligations, our experienced professional services lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
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