Unfair Terms in Small Business Contracts - A Review of Selected Industries

The Australian Competition and Consumer Commission (ACCC) has released a review of unfair terms in small business contracts in selected industries, simultaneously with the commencement of the new laws applying to contracts entered into by small businesses where because of some imbalance between the bargaining position of the parties, particularly contractual provisions not reasonably necessary to protect the legitimate interest of the advantaged party which might cause detriment to a small business. The announcement by ACCC starts with:

On 12 November 2016, a new law to protect small businesses from unfair terms in business-to-business standard form contracts takes effect across Australia.  The law will apply to any new or renewed contract entered into on or after this date. If an existing contract is varied on or after 12 November, the law will also apply to the varied terms.
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If a particular term in a standard-form contract to which a small business is a signatory is found to be unfair by a court or tribunal, then that clause will be void and the small business will no longer be required to comply with it.

Similar legislation already applies to some consumer contracts.

The particular industries or sectors examined in the report are: advertising, retail leasing, franchising, agriculture, independent contracting, telecommunications and waste management.  The report identifies a number of provisions in standard form business contracts that might breach the unfair contracts laws and suggests examples of how they may be remedied.
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The full report is located at the following link http://www.accc.gov.au/publications/unfair-terms-in-small-business-contracts

John Graves

Principal
​Bradfield & Scott Lawyers
​Sydney