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Disclosure obligations if supplying to consumers in NSW

Sections 47A and 47B of the Fair Trading Act 1987 (NSW) (Act) came into effect in July 2020 and imposed disclosure obligations on suppliers of goods and / or services to consumers in NSW. The aim was to improve the awareness and understanding of consumers when procuring a supply of goods and / or services from suppliers. Failure to comply brings with it pecuniary penalties. In this article we explain the disclosure obligations and provide tips to ensure compliance.

What are the disclosure obligations?

When supplying consumers with goods and / or services in NSW, you must take steps to ensure:

  1. that the “substance and effect” of terms or conditions that may “substantially prejudice” the consumer, are brought to their attention;[1]

  2. for intermediaries acting under an arrangement, take reasonable steps to make the consumer aware of any “commission or referral” arrangement whereby you receive a financial benefit from another supplier with respect to that supply.[2]

Let’s break down the obligations

When supplying consumers

‘Supplying’ (which includes resupplying) is defined broadly in the Act as:

  • in relation to goods, supply by ”sale, exchange, lease, hire or hire-purchase” and to ” exhibit, expose or have in possession” goods for those purposes or for the purpose of manufacture or trade;[3] and

  • in relation to services, to provide those services for valuable consideration.[4]

When and if a term or condition will be ‘substantially prejudicial’ is not defined in the Act. However, some guidance is given with respect to the following terms which may fall into this category relating to such supply:

  • a term that excludes liability of the supplier for something;

  • a term that provides that a customer is liable for damage to goods that are delivered;

  • a term that allows a supplier to pass on the data of or given by a customer to a third party, and that enables the third party to identify the customer; or

  • a term that requires a customer to pay an exit fee, balloon or similar such payment.


You will be deemed to be an intermediary if you arrange contracts for the supply of goods and / or services as an agent or refer customers who are consumers to another to obtain such supply, all in exchange for a financial benefit such as a commission or referral fee. The arrangement under which this is done can be a formal contract or an informal oral agreement. Examples of an intermediary are a real estate or travel agent, or a mortgage broker. The guidance given by Fair Trading NSW is that the nature and amount of any financial benefit does not have to be provided, only that there is an arrangement.[5]

When should I disclose?

The time to disclose, whether under sections 47A or 47B of the Act, is before a contract for supply is entered into or before acting under the relevant intermediary arrangement. Fair Trading NSW[6] gives the following timing examples:

  • before the intermediary redirects the consumer to the supplier or before the consumer purchases the goods and / or services; or

  • before the supplier supplies the goods and / or services, so for example, before a contract is entered or order placed.

What are reasonable steps?

The Act itself does not indicate what these are. It will be what is objectively reasonable in the circumstances to make the consumer aware. Again, some examples of these may be:

  • a cover page summary on the front of a contract of any terms that may be substantially prejudicial;

  • an onscreen tick box which can be ticked only after the key summary appears and is read;

  • for intermediaries online, disclosure appears in a pop-up box on the same page where the products and / or services are displayed; or

  • a written or oral explanation provided to consumers.

Three rules of thumb

Your disclosure should be:

  • clear and easy to understand;

  • does not require the customer to find the information themselves; and

  • is a standard part of each of your transactions.

Who is a consumer for the purposes of the Act?

You will be deemed to have supplied goods or services to a consumer where:

  • they are supplied for an amount that does not exceed $100,000 (this amount was raised from $40,000 on 1 July 2021);

  • supplied for a higher price and are of a kind ordinarily acquired for personal domestic or household purposes; or

  • is for goods that are a vehicle or trailer acquired principally for use in the transport of goods on public roads.

This potentially captures a significant number of transactions.

Penalties that will hit the hip pocket

A breach of sections 47A or 47B of the Act may currently attract the following monetary penalties per breach:

  • for individuals, up to $22,000; and

  • for corporations, up to $110,000.[7]

NSW Fair Trading also has the power under section 67 of the Act to issue a penalty notice of $1,100 per offence for corporations, and $550 per offence for individuals.[8]

How can we help?

Whether you are a business in NSW or outside of NSW that supplies goods and / or services to consumers in NSW or is party to an intermediary arrangement with respect to such supply, it is important to be aware of the disclosure obligations that apply in NSW. These provisions should also be considered in conjunction with existing obligations that arise under the Australian Consumer Law, including with respect to unfair contract terms and consumer guarantees.

Our Corporate & Commercial team can assist you with a review of your existing terms, arrangements and practices to assess your compliance and advise you on strengthening on your compliance position.

Author: Rebecca Hegarty


[1] Fair Trading Act 1987 (NSW) s 47A.

[2] Ibid s 47B.

[3] Ibid s 4.

[4] Ibid.

[5] https://www.fairtrading.nsw.gov.au/resource-library/publications/new-disclosure-obligations-for-nsw-businesses

[6] Ibid.

[7] Fair Trading Act 1987 (NSW) s 69.

[8] Schedule 1, Penalty Notice Offences, Fair Trading Regulation 2019 (NSW).