Late last year we released an Alert concerning the new laws that extend unfair contract term protection to standard form “small businesses contracts” (you can read the Alert here).
When does the law take effect?
The new laws take effect on 12 November 2016 and will apply to contracts entered into after this date. It will also apply to existing contracts if they are renewed after 13 November 2016 and to the terms of existing contracts that are varied on or after this date.
What should I do now?
If you deal with small businesses, you should review your standard form contracts now to ensure they comply with the new laws. If you legitimately need to use what might be considered an “unfair” term, then you should also be documenting your reasoning in case of potential claims. As always, best practice risk management will involve an effective process for the resolution of complaints, disputes and potential claims before they escalate.
If you are a small business you should become familiar with your rights under the new laws in relation to unfair terms.
We expect that the ACCC will be active in enforcing the new laws considering that all businesses were given a 12 month transition period to comply with the new laws. We will continue to monitor any ACCC enforcement activities and update you where appropriate.