Unconscionable conduct
What it means
Unconscionable conduct goes beyond hard bargaining, it is behaviour that exploits a serious power imbalance or vulnerability in a way the law regards as unacceptable. The Australian Consumer Law prohibits it, and courts consider factors like relative bargaining power, whether terms were understood, and good faith.
In franchising, allegations of unconscionable conduct commonly arise around the sales process, one-sided enforcement, or the way a franchisor exercises its powers.
In practice
If you feel a franchisor has exploited its position in a way that seems grossly unfair, unconscionable conduct under the ACL, alongside the Code's good-faith obligation, may give you a remedy. Keep records and get legal advice.
A real example
A court finds a franchisor engaged in unconscionable conduct by pressuring an inexperienced, non-English-speaking franchisee to sign without a real chance to get advice, and orders a remedy.
Unconscionable conduct, FAQs
What is unconscionable conduct in franchising?
Conduct so harsh or against good conscience, often exploiting a power imbalance, that the law intervenes. It is prohibited by the Australian Consumer Law and often argued in franchising disputes.
How is unconscionable conduct different from a bad deal?
A bad bargain is not automatically unconscionable. The conduct must be seriously unfair, exploiting vulnerability or power imbalance. Courts weigh bargaining power, understanding and good faith.
See the full franchise glossary, the Fee Index or our buyer guides.