Unfair Contract Terms in Business Contracts

Changes to unfair contract terms in business contracts effective from November 12, 2016.

This new law will protect small businesses from ‘unfair terms’ in standard form contracts with other businesses. These protections against unfair terms currently exist for consumers, but not for businesses.

The new protections will apply to small businesses entering into standard form contracts. To come within the new protections, either party to the contract must have less than 20 employees. Further, the new protections will apply only if the upfront price payable under the contract is below $300,000 for contracts of less than 12 months duration, or under $1 million otherwise. These protections only apply to contracts entered into on or after 12 November 2016.

More details, and examples of unfair terms, are provided on the ACCC’s website and via the Victorian Small Business Commissioners Office