Newsletter
September 2018 Newsletter
The ACCC backing changes to unfair contract terms
After some research into the problem of unfair contract terms by the ACCC (The Australian Consumer and Competition Commission), it came to terms that the way contracts affect small businesses in Business-to-Business (B2B) situations is unfair and possibly detrimental to them.
The Australian Consumer Law currently allows for potential unfair contract claim regarding terms that are in the contract and previously agreed upon, which can be argued in court in order to make this contract void. Yet the irony in this is that there is nothing prohibiting the “unfair” claim being put into and agreed upon in the current contract. It is said that unfair contract terms can be put into contracts and only removed if they are challenged (this should not make the entire contract void).
Some of the biggest flaws that the ACCC have pointed out regarding the current contract terms include:
• The unfair contract terms put into these contracts are not illegal
• The ACCC is not allowed to follow up or seek an infringement notice on businesses that put unfair terms in their contracts
One of the biggest downfalls from this is that there is not real incentive to stop small businesses from putting these types of contract terms as they currently have a high possibility of getting away with it. This ultimately will affect the other small business that is associated with the unfair contract.
Read the full article at Accountants Daily here: https://www.accountantsdaily.com.au/business/12083-accc-backs-bigger-changes-to-laws-for-unfair-contract-terms