New small-business protections from unfair contract terms

The federal Government is delivering one of its key election commitments to extend consumer unfair contract term protections to small businesses.

Announced this week by Minister for Small Business and Assistant Treasurer Kelly O’Dwyer, these changes will cover standard-form contracts where at least one of the parties employs fewer than 20 people and where the upfront price of the contract does not exceed $300,000, or $1 million for contracts longer than 12 months.

“Small businesses have often faced the same vulnerabilities as consumers and under this new change will receive protections when offered ‘take-it-or-leave-it’ contracts,” she said.

“The Government has worked with crossbenchers and stakeholders to secure the support of this change to enable protections for small businesses throughout Australia.”

The Government is providing the Australian Competition and Consumer Commission $1.4 million to support businesses to transition to these new protections over a 12-month period.

“As a result of these changes, Australia’s two million small businesses will have more time and more resources to invest in their business’s success, instead of navigating a confusing maze of standard-form contract terms,” Ms O’Dwyer said.

“This is a Government that wants to get off the back of small business and ensure small businesses can grow and succeed as they contribute to the economy and create local jobs.”

The Small Business and Unfair Contract Terms legislation will extend unfair contract term protections to small businesses through amendments to the Australian Consumer Law and Australian Securities and Investments Commission Act 2001.

COSBOA CEO Peter Strong said the decision would be “received with joy by many, many small businesses who’ve been at the mercy of some appalling practices from a small number of big businesses”.

“The fact that we need these changes shows that a destructive culture has developed in the largest landlords and particularly the largest retailers, which now must change,” he said.

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