ACCC investigates unfair contract terms


Regulator to take enforcement action against those found guilty

ACCC investigates unfair contract terms
Schaper says ACCC is concerned that many potentially unfair contract terms are still appearing in standard contracts.

 

Less than six months after the new unfair contract terms were put in place, the Australian Competition and Consumer Commission (ACCC) is carrying out a number of "in-depth investigations" across many industries.

The regulator has received 48 complaints from businesses about unfair contract terms since the new laws were introduced.

The commission will take enforcement action against those found guilty, ACCC deputy chair Michael Schaper says.

"A number of investigations have been commenced, either in response to issues raised in the ACCC’s recent industry review or as a result of complaints made to the ACCC," Schaper says.

"Our enforcement teams are looking at a variety of contracts across a range of industries."

ACCC’s Unfair terms in small business contracts report identified potentially unfair clauses in standard form contracts, including terms that allow the contract provider:

  • an unreasonable ability to cancel or end an agreement
  • potentially broad and unreasonable powers to protect themselves against loss or damage at the expense of small businesses, through the inclusion of broad indemnities or excessive limitations of liability
  • the ability to unilaterally change the terms of the contract
  • an unreasonable ability to limit or prevent small businesses from exiting their contracts.

Schaper says the commission was concerned that many potentially unfair contract terms are still appearing in standard contracts.

"Businesses that seek to tip the scales too far in their favour at the expense of small businesses leave themselves open to court action by the ACCC."

The regulator is also currently investigating complaints about payment terms and unfair commercial practices that lead to delayed pay times for suppliers.

"The potential for large businesses to unilaterally alter their payment terms and unfairly delay payment times for their suppliers is a significant concern to the ACCC, and may also raise issues of misleading or potentially unconscionable conduct.

"Ensuring small businesses receive protection under new unfair contract terms law is a priority for the ACCC in 2017."

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