It has been widely publicised that from 12 November 2016 unfair contract protections under the Australian Consumer Law (ACL) will be extended to include small business contracts. These changes will also capture renewals of already existing contracts.
The unfair contract protections in the ACL will apply to standard form small business contracts if:
- the contract is for a supply of goods or services, or a sale or grant of an interest in land; and
- at the time of entering into the contract, at least one party is a business that employs less than 20 people; and
- the upfront price payable under the contract is no more than $300,000 or if the contract is for more than 12 months it is for no more than $1 million.
What you can do to become ready
If you haven't already done so, it is time to start reviewing any standard form contracts you have that may be considered a small business contract and take steps, such as reviewing and amending your current buyer and/or seller agreements to ensure they comply with the new legislation.