Sydney home builder admits unfair contract clause preventing negative reviews
Australia's corporate watchdog has criticised a Sydney home building company who have admitted to unfairly gagging customers who may have been unhappy with their work.
The ACCC said Fowler Homes have agreed to quit using contracts which stopped clients from publishing negative reviews or feedback.
A non-disparagement clause in the contract, signed by 434 customers since 2019, covered any attempt to complain online or on a social media platform.
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Sydney home building company Fowler Homes (not pictured) admitted its standard home building contract contained unfair terms AP
The contract stipulated that any customers wanting to speak out about Fowler must first get permission from the builder.
The clause also required clients to indemnify Fowler Homes against any losses suffered from enforcing those terms.
ACCC deputy chair Mick Keogh expressed dismay over the contract, and warned that offending companies face stiffer penalties from next year.
"We are disappointed Fowler Homes continued to use unfair non-disparagement clauses in its standard home building contract when the ACCC's actions against other building companies for similar clauses should have been well known and understood within the industry," Keogh said in a statement.
From November next year, Keogh said tougher punishments could be meted out on businesses using "unfair contract terms" in dealings with clients or customers.
9news.com.au does not suggest there were customers unhappy with Fowler's work.
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In response to ACCC concerns, Fowler Homes made a court-enforceable undertaking acknowledging the clause could have prevented clients from speaking out about issues.
Fowler is not the first building outfit forced by the ACCC to remove gagging clauses.
In 2017, Perth-based builders 101 Residential stripped out their non-disparagement clause from contracts, and Wisdom Properties Group followed suit one year later.
Fowler Homes declined to comment when contacted by 9news.com.au.
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