Waste company JJ Richards has found itself in the metaphorical poo for allegedly incorporating clauses into its small business contract that breach consumer law.
One of the largest privately owned waste management companies in Australia, Queensland-headquartered JJ Richards provides a range of industrial and commercial waste collection and recycling services, with operations in every state and territory as well as in New Zealand.
According to the Australian Competition and Consumer Commission (ACCC), the company failed to remove unfair contract terms until at least April this year, after the provisions for unfair contract terms were extended to small business contracts from 12 November 2016.
At the time, Ben Robertson, a special counsel at Carroll & O’Dea Lawyers, said that there were a range of unfair provisions with which SMEs can no longer be forced to comply, including termination clauses, scope of work, price, delay damages, indemnities and liabilities.
“This is the first time the ACCC has taken court action to enforce the new laws that protect small businesses from unfair contract terms,” ACCC deputy chair Dr Michael Schaper said.
“Where we identify large operators, like JJ Richards, using unfair contract terms that cause harm to small businesses, we will take appropriate enforcement action.”
The ACCC’s prosecution hinges on eight contract terms that it deems to be unfair and in breach of the Australian Consumer Law:
• binding customers to subsequent contracts unless they cancel the contract within 30 days before the end of the term;
• allowing JJ Richards to unilaterally increase its prices;
• removing any liability for JJ Richards where its performance is “prevented or hindered in any way”;
• allowing JJ Richards to charge customers for services not rendered for reasons that are beyond the customer’s control;
• granting JJ Richards exclusive rights to remove waste from a customer’s premises;
• allowing JJ Richards to suspend its service but continue to charge the customer if payment is not made after seven days;
• creating an unlimited indemnity in favour of JJ Richards; and
• preventing customers from terminating their contracts if they have payments outstanding and entitles JJ Richards to continue charging customers equipment rental after the termination of the contract.
Dr Shaper added that the ACCC is seeking declarations where the terms are unfair and therefore void, as well as injunctions preventing JJ Richards from entering into future contracts containing these clauses.
“This action should serve as a reminder to large businesses that haven’t already to review their standard form contracts to ensure they aren’t considered to be unfair under the changes to the law."
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.