Court annuls 34,000 unfair contracts with Fuji Xerox • The Register

Australia’s federal court has invalidated 34,000 contracts offered by local Fuji Xerox offices to local small business customers after they were found to be unfair on a number of counts.

A judgement The study, released Friday, found that over 34,000 contracts issued by the company for products such as photocopiers, scanners, multifunction printers and related managed services contained unfair terms that included the following provisions:

  • Automatic Renewal Terms: Allow Fujifilm to renew the contract for a further period unless the customer terminates the contract a certain number of days before the end of the contract period.
  • Disproportionate notice periods: allows Fujifilm to terminate the contract in a much broader range of circumstances than those that allow the customer to terminate the contract, if any.
  • Limitation of Liability Terms: limit Fujifilm’s liability or require the customer to indemnify Fujifilm without the customer having any corresponding rights.
  • Terms of payment upon termination: require customers to pay extensive exit fees to Fujifilm in the event of contract termination, including certain fees that Fujifilm can unilaterally determine.
  • Unfair payment terms: require customers to pay Fujifilm for software licensed under the Agreement, regardless of whether Fujifilm has delivered the software, and, when purchasing goods, to pay the purchase price prior to delivery.
  • Unilateral change conditions: Permit Fujifilm to unilaterally change some terms of the contract, including the fees and terms contained in documents other than the signed contract.

Among the clauses found to be unfair in the judgment is one that states: “Fujifilm will invoice the customer for licensed software regardless of delivery by Fujifilm.”

Australia’s Competition and Consumer Commission specified that Fuji Xerox and affiliated companies in Australia have signed 34,000 contracts with these terms since 2016 when dealing with small businesses with fewer than 20 employees.

When small businesses objected to the terms, Fuji sued on the matter.

Some business owners complained about the contracts to the commission that took action against Fuji Xerox and its successor companies called Fujifilm.

The ruling includes form letters that Fujifilm’s Australian companies are now required to send to customers informing them that their contracts are void. Fujifilm Australia was also asked to pay part of the Commission’s legal costs.

The company must also implement a compliance program and engage an independent party to review its conduct on a regular basis.

Customers will not be compensated and many will still have a Fuji Xerox/Fujifilm kit, meaning the company can continue to leverage profits from managed print services. And those profits can be hefty, since in such services providers send a steady stream of consumables to customers, in addition to the fees for leasing equipment. ® Court annuls 34,000 unfair contracts with Fuji Xerox • The Register

Laura Coffey

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