ACCC releases report on unfair terms in small business contracts

Posted: 19/12/2016

​The Australian Competition & Consumer Commission (ACCC) has released a report​ to assist up to 2 million small business owners to review potentially unfair terms in standard form, or “take it or leave it” contracts. 

On 12 November 2016, a new law to protect small businesses from unfair terms in business-to-business standard form contracts became effective in Australia in relation to new or renewed contracts entered into on or after this date. If an existing standard-term contract is varied on or after 12 November, the law also applies to the varied terms. The report provides a breakdown of the common terms of concern identified in selected industries, and discusses the kinds of changes that businesses made to their standard contracts to comply with changes to the law

Contracts covered include those between businesses where one employs fewer than 20 people and the contract is worth less than $300,000 in a single year or $1 million if the contract runs for more than a year. Only a court can determine that a term is unfair and if such a determination is made, the remainder of the contract will continue to bind the parties to the extent it is capable of operating without the unfair term.