Is your business in line for an ACCC investigation?

Industry has been slow to update unfair contract terms with the ACCC receiving 48 complaints about B2B contracts between November 2016 and March 2017.

Clauses highlighted as potentially unfair covered:

  • ability to end or cancel and agreement
  • broad indemnities or excessive limitations of liability
  • unilateral right to change contract terms
  • limits on a small businesses ability to exit a contract

The ACCC is also currently investigating complaints about payment terms and unfair commercial practices that have the effect of delaying payment times for suppliers. This is possibly the reason for Coles announcing in March 2017 that it would start paying small suppliers within 14 days, a big change from the 30-60 days or more some suppliers have experienced.

Only a court or tribunal (not the ACCC) can decide that a term is unfair. ACCC can ask for enforceable undertakings and start court action. If a court or tribunal does find a term ‘unfair’, the term will be void – this means it is not binding on the parties. The rest of the contract will continue to bind the parties to the extent it is capable of operating without the unfair term.

It is possible that the ACCC is looking for a business to take action against so that it can demonstrate the worth of these new provisions. Don’t let your business become that example.

If you’d like a legal review of your standard form contracts, contact us.

Related Article –

Australian Standard Contracts Need Updating