From unconscionability to unfairness: A critique of Hong Kong’s unconscionable contracts ordinance with Australian developments

Hong Kong courts have read into its Unconscionable Contracts Ordinance the general doctrine of unconscionability requiring suppliers’ identification and knowing exploitation of consumer weakness, making the Ordinance unsuitable for consumer protection. This has resulted in an approach straddling the unconscionability doctrine and the more intuitive ‘unfairness’-based concepts in unfair terms legislation. Through an analysis comparing Hong Kong’s position and Australian developments in unconscionable conduct and unfair terms in the Australian Consumer Law, and unjust contracts in the Contracts Review Act 1980 (NSW), this article argues that new unfair terms legislation (rather than a reinterpretation of the Ordinance) is needed for Hong Kong. Applying contemporary understandings of consumer behaviour, it proposes a new ‘unfairness’ standard for the legislation with consideration of three factors: unfair tactics in procuring an agreement, erosion of consumer autonomy and choice, and whether the term is reasonably necessary to protect the legitimate business interests of the supplier.