The Abbott Government has today released a draft legislation put forward to further protect small businesses from unfair contract terms.
Businesses with less than 20 employees undertaking transactions under $100,000, or under $250,000 for contracts that go over a year, are to be the main beneficiaries of the new laws, which the Government says are being brought in to give Australian businesses “a level playing field.”
New protections will see small businesses able to point out a contract term they deem to be unfair. A court will be able to strike the term if it is indeed found to be unreasonable and without just merit. Terms that allow big businesses to change prices or key terms, for example, can fall under the “unfair” banner.
“These changes will support small businesses in their day to day transactions, but still encourage operators to conduct their own due diligence on large contracts fundamental to the success of their business,” Small Business Minister Bill Billson said.
“Businesses that offer contracts in these circumstances will be required to comply with the new law.”
The Australian Competition and Consumer Commission has been given $1.4 million by the Government to help implement the new laws and will be conducting a campaign to inform the business community of the changes.
“With this legislation, the Government is restoring time and resources back to small business to invest in their business success rather than navigating a costly and time consuming maze of red tape” Mr Billson said.