The ACCC is currently conducting broad investigations over a number of different industries in relation to the recent ‘Unfair Contract Term’ laws which came into effect on 12 November 2016.
The ACCC has stated that ensuring small businesses receive protection under new unfair contract terms law is a priority for the ACCC in 2017.
If you are a running a business, you should be aware of certain clauses within your business to business (B2B) contracts which may be deemed to be unfair contracts terms by the ACCC.
The new laws come into effect when you enter into a contractual relationship with another business, where at least one party to the contract;
- employs less than 20 people; and
- the contract is valued up to $300,000.00 in a single year; or
- the contract is valued up to $1,000,000.00 if it extends longer than one (1) year.
Types of clauses you should be aware of which the ACCC may deem to be unfair, include, but are not limited to, clauses such as:
- an unreasonable ability to cancel or end an agreement;
- potentially broad and unreasonable powers to protect yourself against loss or damage at the expense of small businesses, through the inclusion of broad indemnities or excessive limitations of liability;
- the ability to unilaterally change the terms of the contract;
- an unreasonable ability to limit or prevent small businesses from exiting their contracts;
Most often, the above examples exist in some variation within standard form contracts as they allow very little room for negotiation by the contracting party and are usually offered on a take-it or leave-it basis.
It should also be noted that if you vary the terms of a contract after 12 November 2016 which was executed prior to the introduction of the new laws, they too will be captured within the scope of the new laws.
Although only a court can make a determination as to a clause being unfair, if found to be unfair, the clause could be invalid. This may result in the contracting party not having to comply with the clause and would likely lead to an unwarranted effect on the contract. In certain circumstances the entire contract may not be capable of operation and therefore be void.
We have previously covered the issue of unfair contract terms in our post ‘Take it or Leave it – Unfair Contract Terms Involving Small Business’.
Contact Irish Bentley Lawyers
If you believe your business may be at risk, or if you believe your business has been subject to unfair contract terms in a contract, please contact us for assistance. We can advise your business in relation to entering into contracts ensuring conformity with the relevant law.
At Irish Bentley Lawyers, we have experience in the protection of rights for individuals, start-ups and established businesses. Our solicitors can provide assistance in the drafting, reviewing and disputing of contracts. Our experienced team is able to assist in contract issues as well as a wide variety of commercial law matters.
Please note that the above does not constitute legal advice and Irish Bentley Lawyers make no representations or warranties as to the accuracy of any of the information contained herein. If you are concerned that there may be unfair contract terms included in your business contracts, then please do not hesitate to contact the team at Irish Bentley Lawyers – there is no substitute for proper legal advice based on your individual and unique circumstances.
Please contact us on (07) 3229 4060 for more information.