Many large businesses use a standard form contract when dealing with customers. This ensures the same terms and conditions apply to every transaction involving the supply of goods or services. The purpose is to prevent negotiations between parties, saving the business time and money.
Changes to the Australian Consumer Law (Effective 9 November 2023)
Previously, under Australian Consumer Law, consumers or small businesses could challenge an unfair term in a standard form contract and have it declared void by a court. However, recent changes have significantly expanded the unfair contract terms regime:
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The definition of a small business now includes those with turnover under $10 million or fewer than 100 employees.
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A standard form contract can be challenged even if some negotiation occurred.
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Penalties of $50 million or more can apply for breaching unfair contract terms rules.
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Courts can impose new remedies, such as orders to prevent or reduce loss and to prohibit unfair terms in future contracts.
What This Means for Businesses and Consumers
Given this tougher legal environment, consumers and small businesses now have stronger protections against unfair practices by large corporations. If you encounter unfair terms in a standard form contract that disadvantage you, it is wise to consider your legal options.
Need Advice on Unfair Contract Terms?
If you believe a standard form contract contains unfair terms, contact A. S. Laumberg today for expert legal advice and assistance protecting your rights.