Are signs in shops that ask you to pay for something if you break it legal?

Just like with every single question asked of a lawyer ever, the answer is always: ‘it depends’, because it always just depends.

You’ll see these signs in one of two scenarios:

  1. The first, the sign is at the entrance of the shop.  A sign at the entrance of a implies that the shop is making it a condition of entry into the facilities that you agree to pay for something you break.  The theory here is that by placing the sign at the entrance in a manner that can be read and easily understood before you enter  would lead you to self asses whether you wanted to enter the store under the terms it sets.  If you don’t agree to the terms then you don’t go in.
  2. The other way this sign might appear is while you’re already inside the shop.  Since you didn’t realise there were terms and conditions of entry, in the absence of a sign then you couldn’t be expected to make a decision whether you wanted to agree to the terms of entry or not.

Yes, but are these signs legal?

Well, sure, because on the face of it (prima facie) they don’t usually contain any language that is not allowed under the Australian Consumer Law.  This isn’t a criminal law matter or a consumer law matter though it’s a matter for our old friend civil law.  What’s happening when someone asks you to pay for something you haven’t purchased is that they’re making a claim of damages or loss of earnings against you on the spot.

What does this mean?

Say if you go into a shop and you break a vase worth $100, the shop may or may not have a sign informing shoppers that if they break something they must pay for it.  The moment the shopkeeper asks you to pay for the broken vase they are making a claim of damages against you to the value of $100.00.

That’s essentially the only avenue available to the shopkeeper, they can’t sell the vase to anyone else so they have lost $100 and it’s not your vase to break because you haven’t actually bought it, or bought it yet.  If the sign is at the entrance to the shop then  the shopkeeper would claim that you knew the conditions of entry and you still entered anyway and that you should be bound by them.

So if you’re in a shop and you break something and the shopkeeper demands you pay for it you could either:

  1. Pay for it, or
  2. Pay for some/ most of it;
  3. Dispute the claim.

You should probably just get a lawyer though, or you could pay.