New protections for small businesses against unfair contract terms have been issued by ASIC, in a win for small firm operators.
The protections are an extension of the existing provisions available to consumers. According to a statement from ASIC, these protections will apply to all standard form small business contracts, and will take effect from 12 November this year.
“Small businesses, like consumers, have limited market power and a reduced ability to vary 'take it or leave it' standard form contracts.
"The consumer unfair contract term protections get positive outcomes for consumers and ASIC anticipates being able to do the same for small business, once the protections are extended to them,” said ASIC commissioner Greg Tanzer.
The provisions will apply to contracts where at least one of the firms employs fewer than 20 people, and where the contract is worth up to $300,000 in a single year or $1 million over multiple years.
ASIC is urging business to review their standard form contracts before the law comes into effect.
Complaints will be managed by the Financial Ombudsman Service (FOS) or the Credit and Investments Ombudsman (CIO) as well as directly by ASIC for all matters relating to financial products and services.
Other goods and services will be overseen jointly by the Australian Competition and Consumer Commission (ACCC) as well as the relevant state and territory fair trading bodies.
More information on the protections is available from the ASIC website.