The Australian Competition and Consumer Commission (ACCC) has commenced Federal Court proceedings against national waste management company JJ Richards & Sons Pty Ltd (JJ Richards) alleging that its standard form small business contract includes multiple terms which are 'unfair' under the new business-tobusiness unfair contract terms regime which came into effect last November.
Previously, the unfair contract terms provisions of the Australian Consumer Law (ACL) only applied to standard form consumer contracts, however the November 2016 legislative changes extended these provisions to include standard form contracts between small businesses. The new regime defines a 'small business contract' as one in which at least one of the parties is a business employing fewer than 20 people, and the upfront contract price does not exceed A$300,000 (or A$1 million if the contract term is longer than 12 months). The ACCC is alleging that a number of terms in JJ Richard's small business contract are unfair, including terms that:
- allow JJ Richards to unilaterally increase its prices;
- allow JJ Richards to charge for services not provided for reasons beyond the customer's control;
- allow JJ Richards to suspend the service provided and continue to charge; and
- create an unlimited indemnity in favour of JJ Richards. If found to be unfair these terms will be rendered void and cannot be relied upon as a provision governing JJ Richard's relationship with small businesses.
The ACCC's action serves as reminder for traders, including online and e-commerce traders, to review the terms and conditions of standard form contracts with small businesses to ensure they are compliant under the ACL.
The ACCC media release is available here.