unfair contract

A new law recently passed by the Federal Government will protect small businesses from unfair contact terms in standard form contracts. The new law will come into force on 12 November 2016 following a 12 month transition period.

A small business is defined as employing less than 20 people, including casual employees employed on a regular and systematic basis.

The law will apply to a standard form contract entered into or renewed on or after 12 November 2016 where:
• it is for the supply of goods or serves or the sale or grant of an interest in land;
• at least one oft he parties is a small business; and
• the upfront price payable under the contract is no more than $300,000 ($1 million if the contract is for longer than 12 months).
If a court or tribunal finds that a term is ‘unfair’ the term will be void. The rest of the contract will continue to bind the parties to the extent that it is capable of operating without the unfair term.

Click here for more information about this new law.

The National Retail Association is interested in hearing your views to include in a submission on this incoming law, particularly whether it provides equivalent and enforceable protections for small businesses.

If you require more information, contact the NRA