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Commercial Law
Written by Eugene Reinboth
The Australia-wide law protecting consumers from unfair terms in standard form consumer contracts came into effect on 1 July 2010. That law was extended to business to business contracts entered into or renewed on or after 12 November 2016.
So, if a business prepares and offers you a contract on a ‘take it or leave it’ basis (i.e. you have little or no opportunity to negotiate the terms), it is likely to be a standard form contract. The business-to-business unfair contract terms law applies to contracts for the supply of goods, services, or the sale or grant of an interest in land, where:
at least one of the parties is a small business (that employs less than 20 employees, including casual employees) and
the upfront price payable2 under the contract is no more than $300 000 (or $1 million if the contract is for more than 12 months).
To be unfair, a term must:
cause a significant imbalance in the parties’ rights and obligations, and
not be reasonably necessary to protect the legitimate interests of the party advantaged by
The term, and
cause detriment (e.g. financial) to a small business if it were applied or relied upon.
As a business, you may be...
