Australian government extends unfair contract protection to small firms

Paul Snell is managing editor at Supply Management
27 April 2015

Small businesses in Australia will now benefit from similar protections consumers that have when signing contracts, the government has announced.

The change in the law will allow courts to rule out terms, such as those that allow for unilateral price changes, that are considered unfair.

The law will apply to companies with less than 20 employees, on transactions under AUS$100,000 or multi-year deals worth less than AUS$250,000.

Bruce Billson, minister for small business, said: “Like consumers, small businesses often lack the time, legal expertise or bargaining power and have been locked into ‘take it or leave it’ contracts, with little scope to negotiate just and fair terms.

“Today marks an important step forward in ensuring strong protections for small businesses when contending with harmful ‘consumer-like’ contracts.”

The government has provided AUS$1.4 million to the Australian Competition and Consumer Commission to help businesses comply with the new rules.

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