Unfair Contract Provisions Change
Under the Australian Consumer Law (ACL) clauses in standard form contracts that are unfair may be declared void where one of the parties is a small business. There is no “big stick” which is forcing business to remove unfair provisions from standard contracts.
But this is likely to change. In particular, a significant monetary penalty for breach of the ACL is all but certain.
To find out what can be considered an unfair contract term and how the ACL changes might impact you, go to Unfair Contact Terms (Nov 2020)
In summary, under the proposed changes:-
- The upfront price payable under the contract will be unlimited
- A small business will be one which employs less than 100 people or has an annual turnover of less than $10 million
- A standard form contract may include a template agreement and
- A clause may be presumed to be unfair if the same or a substantially similar term was found to be unfair in similar circumstances in a separate case.
If a provision is found to be unfair:-
- Civil penalties may be imposed and
- There will be an opportunity for alternative remedies.
The proposed amount of the civil penalties for an unfair contract is not yet known but could run into the millions.
For more information or assistance, you can contact the author Christine Jankus on 1300 729 113 or by email.