Monthly Archives: November 2023

Small businesses protection against unfair contract laws

Unfair contract laws to protect small businesses were introduced in 2016.  We are pleased to report that as of Thursday 9th November, they have substantially tightened.

One of the main changes is that fines can now be imposed against those enforcing unfair contract terms on small businesses.  Those fines are up to $2,500,000 for individuals and $50,000,000 for corporations.  Previously there were no fines.  Now these laws have some teeth!

Furthermore, a person who breaches the new rules can be disqualified from being a director for up to 6 years.

Following are some examples of unfair contract laws (where it gives one party but not the other):-

  • Vary the terms of a contract.
  • Terminate a contract.
  • Renew or not renew a contract.
  • Apply penalties to the other party for a breach of contract.
  • Vary the price payable without the other party having the right to terminate the contract.
  • Vary the characteristics of the contracted goods or services.
  • Restrict one party’s right to the sue the other party.
  • Another important change is the definition of a small business has been increased from 20 to 100 full and part time employees.

The somewhat recent small business protection now really has some teeth.  Moreover, it will act as a deterrent against those who have unfairly acted against small businesses in the past.

Please contact us if you would like a referral for a unfair contract matter to a qualified lawyer.

You can also read more at posts by ACCC and ASIC