On 10 November 2020, the Australian Commonwealth Government announced that it had secured agreement from State and Territory governments to make changes to strengthen Australia's unfair contract terms laws. The proposed changes will:
- make unfair terms unlawful and give courts more flexibility on remedies, including the power to impose civil penalties;
- expand the definition of "small business" and remove the requirement for contract values to be below a certain threshold; and
- clarify when the protections apply, including what amounts to a "standard form contract".
No draft legislation has been released as yet, but you can read Baker McKenzie's explanation of the reforms and their significant implications for anyone dealing with small businesses or consumers in our client alert.
These reforms will help reduce the prevalence of unfair contract terms in standard form contracts, and improve consumer and small business confidence when entering into contracts.