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Court voids 34,000 unfair Fuji Xerox contracts

Required customers to pay for software they did not receive, among other sins

Australia's Federal Court has voided 34,000 contracts that Fuji Xerox's local outposts offered to local small business customers, after they were found to be unfair in many ways.

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

  • Automatic renewal terms – permit Fujifilm to renew the contract for a further period unless customers cancel the contract a certain number of days before the end of the contract term.
  • Disproportionate termination terms – allows Fujifilm to terminate the contract in a significantly wider range of circumstances than those which allow the customer to terminate the contract, if any.
  • Liability limitation terms – limit Fujifilm's liability or require the customer to indemnify Fujifilm without corresponding rights for the customer.
  • Termination payment terms – require customers to pay extensive exit fees to Fujifilm in the event the contract is terminated, including certain charges which Fujifilm can set unilaterally.
  • Unfair payment terms – require customers to pay Fujifilm for software licensed pursuant to the agreement irrespective of whether Fujifilm has delivered the software and, when goods are purchased, to pay the purchase price prior to delivery.
  • Unilateral variation terms – permit Fujifilm to vary some terms of the contract unilaterally, including the charges and terms contained in documents other than the signed contract.

Clauses ruled unfair in the judgment include one that states: "Fujifilm will invoice the customer for licensed software irrespective of delivery by Fujifilm."

Australia's Competition and Consumer Commission stated that Fuji Xerox and associated businesses in Australia issued 34,000 contracts using those terms since 2016, when dealing with small business that employ fewer than 20 staff.

When small business objected to the terms, Fuji litigated the matter.

Some business owners complained about the contracts to the Commission, which acted against Fuji Xerox and its successor companies named Fujifilm.

The judgement includes form letters that Fujifilm's Australian companies are now required to send to customers, advising them that their contracts have been voided. Fujifilm Australia has also been required to pay some of the Commission's legal costs.

The company must also institute a compliance program and engage an independent party to regularly review its behavior.

Customers won't be compensated, and many will still have Fuji Xerox/Fujifilm kit in place – meaning the company can keep creaming the profits that come from managed print services. And those profits can be rich, as such services see vendors send a steady stream of consumables to customers on top of charges to lease equipment. ®

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