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Protection for small business owners is on the way in the form of amendments to the unfair contract provisions of the Competition & Consumer Act 2010 [Cth] which are expected to come into force on 12 November 2016.
Currently the Act provides for additional protection for consumers. The definition of “consumers” is consumers of goods and services for “ordinary domestic and household use” or goods and services under $40,000.
The amendments to the Act will allow a small business [of fewer than 20 employees including casual staff] to enjoy similar protection as “consumers” in respect of terms in contracts which prejudice the rights of the small business.
The typical scenario is where a small business is provided with a “standard” contract by a larger business and the terms are unfair or take advantage of the superior bargaining position of the larger business. A “standard contract” is considered to be a contract that is “not open to negotiation” and is presented to the small business on a “take it or leave it” basis.