In this post we will talk about the new Unfair Contract Regime (Regime), which came into effect in November 2016 in accordance with the Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Act 2015. The purpose of the Regime was to protect small businesses from being exploited by their mega counterparty, which previously is only afforded to individual consumers.
Unfair Contract Void
Under the new regime, a consumer contract or small business contract (including contract for financial services) is void if:
- The term is unfair; and
- The contract is a standard form contract.
What is a small business contract?
A contract is a small business contract if:
- The contract is for a supply of goods or services, or a sale or grant of an interest in land; and
- At the time the contract is entered into, at least one party to the contract is a business that employs fewer than 20 persons; and
- Either of the following applies:
- The upfront price payable under the contract does not exceed $300,000;
- The contract has a duration of more than 12 months and the upfront price payable under the contract does not exceed $1,000,000.00.
Continue reading “New Unfair Contract Term Regime – More Protection for Small Businesses”