Sladen Snippet – Extending unfair contract term protections to small businesses

The Australian Government has released a consultation paper which seeks to protect small businesses from the burden of unfair contract terms in standard form contracts.

Unfair contract terms go beyond what is necessary to protect the legitimate interests of the party seeking to include the terms in the contract (for example a large corporate business). These terms create a significant imbalance in the rights and obligations of the parties to the contract. Similar provisions currently exist to protect consumers in dealing with businesses.

The Treasury, on behalf of Consumer Affairs Australia and New Zealand, are proposing changes that would allow a court to strike out any term it believes is not necessary and goes beyond what is required to protect the legitimate interests of the party benefiting from the inclusion of the term.

The consultation is part of a comprehensive review of competition laws and policy. As part of the review and consultations, The Treasury is seeking input from small business owners in relation to their experience in negotiating contracts and also the turnover threshold to determine what a small business is.

Contact us today if you would like more information on the consultation, or would like to make a formal submission.

Meagan O'Connor
Sladen Legal
+61 3 9611 0106

Luke Duggan
Sladen Legal
+61 3 9611 0176