Small business gains access to unfair contract protections

The Federal Government has announced that the unfair contract protections currently available to consumers will now be available to small business owners.

In a joint announcement by Prime Minister Tony Abbott and Minister for Small Business Bruce Billson, the government has announced that the unfair contract protections currently available to consumers will now be available to small business owners.

Minister Billson said the Abbott government wants to ensure that small businesses have access to a level playing field so they can continue to grow, invest and create jobs. Like consumers, small businesses are often presented with ‘take it or leave it’ contracts, with little scope to negotiate just and fair terms.

“Small businesses often lack the time, legal expertise or bargaining power to resist enforcement of unfair terms against them,” Billson said in press release. “The Australian Small Business Commissioner has observed instances of misuse of market power in contracting of telephone and internet services; office or commercial leasing equipment; and retail outlet leases. This is why we need to make sure we have strong protections for small businesses.”

The new small business protections will allow the courts to declare void a term within a contract that is unfair. For example, a term that allows a big business to unilaterally change the price or key terms during the course of the contract could be considered unfair. 

Businesses that offer low value standard form contracts will have to comply with the new law. The Abbott government has provided $1.4 million in funding to the Australian Competition and Consumer Commission to specifically ensure businesses comply with the new rules.

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