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ACCC Rules Servcorp Business Contracts Unfair

The ACCC has today ruled that serviced office provider, Servcorp, imposed 12 unfair terms in its business contracts – terms which have since been deemed void.

ACCC Deputy Chair, Mick Keogh, asserts businesses can no longer impose terms which create a significant power imbalance, and may cause “significant financial detriment to a small business.”

Unfair terms include those with the effect of:

  • automatically renewing a customer’s contract, unless the customer had opted out, and allowing Servcorp to then unilaterally increase the contract price;
  • permitting Servcorp to unilaterally terminate contracts;
  • unreasonably limiting Servcorp’s liability or imposing unreasonable liability on the customer; and
  • permitting Servcorp to keep a customer’s security deposit if a customer failed to request its return.

Keogh affirms Servcorp’s contracts contain unfair terms, after Australian Consumer Law was extended to cover business-to-business contracts in 2016.

As part of the ruling, Servcorp has agreed to establish an unfair compliance program for its Australian entity, in addition to paying the ACCC’s costs.

Further information is available on the ACCC’s website here.

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