XN000022-1995-10-19 — Page 26

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Unconscionable Contracts Ordinance to become effective

The Secretary for Trade and Industry, Mr T H Chau, has appointed tomorrow (Friday) as the commencement date for the Unconscionable Contracts Ordinance.

The Ordinance was enacted on October 20, 1994. A 12-month grace period has been given for the business community to consider their use of contracts in the sale of goods and supply of services and to make any necessary adjustments before the Ordinance is brought into effect.

"Under the Ordinance, the court is empowered to exercise control over unconscionable terms in consumer contracts for the sale of goods and supply of services. It also seeks to provide judicial guidelines in applying the test of conscionableness," a government spokesman said today (Thursday).

If the court finds a contract or any part of a contract to have been unconscionable at the time it was made, the court may:

a) refuse to enforce the contract;

b) enforce the remainder of the contract without the unconscionable part; and

c) limit the application of, or revise or alter any unconscionable part so as to

avoid any unconscionable result.

"With this Ordinance, we hope to offer the greatest protection to consumers against unconscionable contracts without undue interference in the freedom of contract," the spokesman said.

End/Thursday, October 19, 1995