ACCC actively investigating unfair terms
Last year and earlier this year, we reported on the new business-to-business (B2B) unfair contract terms laws introduced in November 2016 which apply to standard form contracts from earlier articles: the clock is ticking on new unfair contract term protections – are you ready?; unfair contract terms extend to small businesses and unfair contract terms laws to extend to small business contracts.
In the five months since the introduction of the unfair terms laws, the ACCC has received 48 complaints from businesses. As a result, some in-depth investigations have been instigated across a variety of contracts and industries.
Clauses which are being identified as being potentially unfair include:
- unreasonable ability for the stronger party to cancel or terminate an agreement
- inclusion of broad indemnities or excessive limitations of liability
- ability for the stronger party to unilaterally change the terms of the contract
- unreasonable ability to limit or stop the small business from exiting the contract.
The ACCC has expressed its concern, despite the commencement of the new laws and education campaigns, many unfair contract terms continue to appear in standard form contracts and disadvantage small businesses. Businesses with unfair terms in their standard form contracts risk court action. Unfair contract terms may also result in offences relating to misleading and unconscionable conduct.
The ACCC recently released its priorities for 2017 which specifically includes unfair contract terms and the ACCC is clearly focusing its efforts and resources in this space. The ACCC is expected to take enforcement action during 2017, and we will continue to closely monitor how this area of law will develop.
If you would like to check if any of your contracts will fall under this new regime or for us to review your contract terms to maximise their enforceability, please contact us.
This article was written by Georgia Davies-Jackson, Lawyer – Commercial