Business survey about unfair contract term protections

The Commissioner for Consumer Protection is encouraging WA’s small business community to have a say in a Commonwealth consultation about protecting small businesses from unfair contract terms.

Currently under the Australian Consumer Law (ACL) individual consumers are protected from unfair contract terms in standard form (take it or leave it) contracts. A term would be unfair and can be voided by the Courts if it causes a significant imbalance in the parties’ rights and obligations and is not reasonably necessary to protect the legitimate interest of the supplier.

The ACL does not provide such safeguards for small business but Commissioner for Consumer Protection Anne Driscoll says the consultation, which runs until 1 August 2014, provides an opportunity to comment on potential for change.

“The consultation seeks a view on whether consumer law should be amended so that unfair contract protections extend to small businesses,” she said.

“Like consumers, small businesses are often offered standard form contracts on a take it or leave it basis. In the business world this could be for office supplies or equipment, leasing of work space etc.

“We know that small businesses can lack the bargaining power or legal expertise of bigger companies to negotiate contracts and may have little choice but to sign a contract knowing it may cause them detriment.

“This consultation asks stakeholders to share their experiences with contracts viewed to be potentially unfair to help decide how best to protect small businesses in future and if they should be covered by improved protections.

“I would urge members of the small business community in WA to contribute to this consultative process as it directly affects them.”

Small businesses can access the consultation paper on the Consumer Protection website (www.commerce.wa.gov.au/consultations) along with instructions to provide feedback via the Commonwealth Treasury website. Businesses can also complete a 10-15 minute online survey available at: www.commerce.wa.gov.au/consumer-protection/extending-unfair-contract-ter...

Responses need to be submitted by 1 August 2014. After the consultation, Consumer Affairs Ministers from all of the states and territories will meet to discuss the feedback and assess the best way forward.

END OF RELEASE

(Consumer Protection is a division of the Department of Commerce)

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Media Contact:

Alina Cavanagh

9282 0679 or 0423-846 397

alina.cavanagh@commerce.wa.gov.au

 

Consumer Protection
Media release
12 Jun 2014

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