ACCC Targets Unfair Contracts
The ACCC is educating small businesses on the new unfair contract laws which will prevent bad or one-sided contracts given to small businesses.
The ACCC has already taken several legal actions against waste management company JJ Richards and Sons Pty Ltd and office space provider Servcorp Ltd. Both actions are in response to unfair service agreements and contract terms with small business clients.
In November last year the ACCC released a report detailing their examination of 46 standard form contracts across seven industries which all had unfair terms in their contracts.
The ACCC Deputy Chair Dr. Michael Schaper stated how committed and serious the ACCC is when addressing inappropriate business contracts and deals concerning small business.
“These cases show the ACCC is serious about enforcing the new laws, and we will continue to take action where appropriate to ensure that small businesses are protected. ACCC engagement has seen tens of thousands of new or existing contracts improved, but this is the tip of the iceberg as Australia’s two million small businesses sign an average of eight standard form contracts a year.”
Earlier in the year well known small businesses such as Uber, Fairfax media, Jetts Fitness, and Lendlease Property Management and Sensis all amended their standard small business contracts in response to the unfair contract terms raised by the ACCC.
The ACCC has provided a view helpful tips that small business owners should look out for when determining terms that may be considered unfair.
- automatic renewal terms binding customers to subsequent contracts unless they cancel the contract within a certain timeframe
- terms allowing a trader to unilaterally increase its prices or alter the terms and conditions of the contract
- terms that broadly limit a trader’s liability towards a small business, or which require a small business to indemnify a trader in an unreasonably broad range of circumstances
- terms that allow traders to cancel or terminate an agreement without cause
If any of these are unsuccessful a small business does still have the option to
- contact the ACCC (or otherwise ASIC if it relates to a financial service or product)
- seek the assistance of the State’s Small Business Commissioner or ASBFEO
The ACCC has published a guide to help small business keep contracts and terms fair and affordable. The new laws apply to any standard form small business contract entered or renewed on or after November 12th, 2016.