Skip to main content

Unfair Contract Terms

By May 12, 2018No Comments

All small businesses should be aware that they may be subject (and/caught) by the Unfair Contract Terms provisions of the Australian Consumer Law.

Many commercial contracts used by small business will be captured by the unfair contract provisions of the Australian Consumer Law (ACL).  These may include business sale contracts, leases and franchise agreements which are offered on a take it or leave it basis, regardless of whether one party holds a traditional position of power.  Contracts that have been subject to genuine negotiation will be less likely to be regarded as unfair.  If a contract satisfies the criteria of section 23(4) (this section establishes what is considered a small business) and one party is unwilling to negotiate, the contract will be open to scrutiny.

Franchisors in particular should pay careful attention to the provisions of their standard-form franchise agreements.

If you require any further information regarding how your business may be impacted by the Unfair Contact Terms provision please contact us for a obligation free discussion.