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In previous news issues Forum Law has notified our readers of the impending changes to the Australian Consumer Law to help balance the bargaining position between small business and big business in contracts.
From 12 November 2016 new protections will apply to new or renewed “standard form” small business contracts. A “small business contract” is a contract where at least one of the parties is a “small business” and the upfront price payable under the contract is less than $300,000, or less than $1 million if the contract if the contract runs for more than one year. A “small business” is a business that employs less than 20 employees including casual employees employed of a regular and consistent basis.
The consideration of what is a “standard” form of contract includes whether the contract was prepared in advance, and whether the parties had an opportunity to negotiate the terms of the contract before the contract has been presented to the other party.
A court may decide that a term in a contract is “unfair” if:
If a court finds that a term or terms in the contract are unfair, then the court can set aside the term and the term would be unenforceable.