What is a credit contract?

For the purposes of the FSP Act a credit contract is any contract under which credit is provided to a person (which includes a natural person or business) for:

• the purchase of goods or services (for example, credit sales)
• general purposes undisclosed to the provider (for example, cash loans, credit cards and arranged overdrafts)
• the purchase of land, buildings, or for improvements (for example, mortgagees, buy-back transactions and revolving credit arrangements)
• investment purposes (for example, investing in stocks, a company or developing a business). 

However the FSP Act does not apply to credit contracts where:

• no interest is charged or payable;
• an account goes into unarranged overdraft;
• the agreement is for the sale of property, or the provision of services, where the amount payable is the agreed price of the property or service and must be paid within two months from the date the contract is made;
• goods are leased for personal or household use where the amount paid by the lessee is the same or more than the cash price of the goods and/or they have an option to buy the goods outright for an amount equal to or less than their market value at the end of the lease term.