| The Competition and Consumer Act 2010 (Cth) and Australian Securities and Investments Commission Act 2001 (Cth) have recently been amended to extend unfair contract term protection laws to small business contracts. Small businesses that enter standard form contracts or Service Level Agreement on or after 12 November 2016 will be protected by a new unfair contract regime. This new regime will significantly affect all road freight operators having only one employee (and one truck) in their fleet, and therefore fall within the definition of a small business. A small business is a business employing fewer than 20 employees; casual employees employed on a regular and systematic basis will be counted in the number of employees.
This regime applies to a standard form contract or Service Level Agreements for the transport of freight by road between contracting parties where one is a small business and assuming the contract’s value is below the designated amounts. It is also important to note the regime applies to a standard form contract between two small businesses.
The new regime will be particularly relevant for the transport industry. Careful consideration of all contracts falling within the regime is an absolute necessity. ECC can review your Subcontractor Management and Service Level Agreements to ensure that your contract terms are fair. This does not mean that contacts cannot contain terms that advantage one contracting party over the other. If a term provides an advantage to one party, it should do so legitimately. |
