Concerns are growing for many sectors that seem to be unprepared for changes coming into effect in November regarding unfair contracts provisions for consumers that are now extended to include small business.
The Australian Competition and Consumer Commission (ACCC) says that small businesses enter into an average of eight standard contracts a year and with more than two million small businesses in Australia, the change could affect millions of standard form contracts.
Deputy chair Dr Michael Schaper urges all businesses that issue these kinds of contracts to review their terms before 12 November to ensure they are complaint with the new laws.
“Almost two thirds of small businesses have claimed to have experienced unfairness in the contract terms and conditions that they have signed up for and almost half report experiencing some harm as a result,” he explains.
Currently, many small businesses entering into contracts with larger businesses have no option but to accept all the terms of the standard form contract that they are given. Under this new law, the courts will be able to strike out any unfair contract terms.
“Some industries have responded swiftly to understand their new obligations when dealing with small businesses.
“Notably, the ACCC has engaged with the retail leasing industry, including the major shopping centre landlords, to review their standard form contracts. Our review revealed several areas of concern.
“However, the quick steps that have been taken by the retail leasing industry are a guide for other sectors in adequately preparing for the new unfair contract terms law. All businesses should make an effort to understand how they will be affected by the law and whether it covers any deals they are engaged in,” he explains.