The ACCC's dairy inquiry uncovered instances of unfair contract terms
The ACCC's dairy inquiry uncovered instances of unfair contract terms

Unfair contract law 'not strong enough'

posted by Alex Daniel
in Law
3 September 2018

Australia should strengthen its laws on unfair terms in standard form contracts between businesses, its competition watchdog has said. 

It should also introduce penalties for breaching any laws which are put in place on the issue, according to Rod Sims, chair of the Australian Competition and Consumer Commission.
Speaking at the National Small Business Summit in Sydney, Sims said the law “simply isn’t strong enough,” and that it provides businesses an incentive to try to get away with putting unfair terms in their contracts.
Australian law currently allows contract terms to be challenged in court and declared void if found to be unfair, but it doesn’t rule out such a term being included in the first place.
The ACCC claimed there is subsequently little it can do to hold companies to account for conduct prior to challenging the terms.
“The business-to-business unfair contract term law is an extremely valuable law that works to protect small businesses against terms that just should not be found in contracts. However it does not go far enough, and its limitations really tie our hands as a regulator,” said Sims.
“The regime has two significant flaws: first, unfair contract terms are not illegal, and second the ACCC cannot seek penalties when the court has declared an unfair contract term void, nor can we issue infringement notices for contract terms that are likely to be unfair.”
“The law simply isn’t strong enough. Unfair contract terms should be illegal. As it stands, no real incentive exists for businesses to ensure their standard contracts do not contain such terms, which really means they have incentive to include them and see if they can get away with it.
“This is out of step with other provisions in the Competition and Consumer Act 2010, and Australian small businesses are the ones paying the price.”

It should also introduce penalties for breaching any laws which are put in place on the issue, according to Rod Sims, chair of the Australian Competition and Consumer Commission.

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