Get Ready to Review Your Contracts – Unfair Contract Terms to be Amended!

The Federal Government has announced proposed amendments to the Unfair Contract Scheme which will expand on the current unfair contract term provisions under the Australian Competition and Consumer Law. Whilst we are still awaiting the draft legislation, the following are some of the proposed changes:

  • Unfair contract terms will be considered 'unlawful' instead of 'void' under the current scheme.
  • The "small business" threshold will be increased from the current threshold of fewer than 20 employees to either fewer than 100 employees or an annual turnover of less than $10,000,000.
  • Civil penalties will apply for breaches of the Unfair Contract Scheme

The Unfair Contract Scheme applies to "standard form contracts" used by businesses contracting with either their customers, consumers or other businesses.

It's important that you review your standard form contracts for any terms that might be captured by the Unfair Contract Scheme and update your contracts in anticipation of the proposed changes. It is important that you obtain advices from a suitably qualified commercial lawyer in relation to your contracts and whether or not the changes will apply to your standard form contracts.

 

 

 

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