Push to give small business unfair contract protection

The Commonwealth Government has made a commitment to give Australian small businesses a ‘fair go’ by extending the unfair contract protections currently available to consumers to cover the small business sector, expected to be welcomed by smaller suppliers and retailers, including convenience stores.

The move follows an earlier announcement on draft legislation to establish an Australian Small Business and Family Enterprise Ombudsman to ensure that disputes will be impartially resolved.

“Small business is the engine room of Australia’s economic future. We want to ensure that small businesses have access to a level playing field so they can continue to grow, invest and create jobs,” said Minister for Small Business Bruce Bilson in a joint release with Prime Minister Tony Abbott.

Like consumers, small businesses are often presented with ‘take it or leave it’ contracts, with little scope to negotiate just and fair terms.

The Australian Small Business Commissioner has observed instances of misuse of market power in contracting of telephone and internet services; office or commercial leasing equipment; and retail outlet leases.

The new small business protections will allow the courts to declare void a term within a contract that is unfair, such as a term that allows a big business to unilaterally change the price or key terms during the course of the contract.

Businesses that offer low value standard form contracts will have to comply with the new law.
The Government has provided $1.4 million to the Australian Competition and Consumer Commission to ensure businesses comply with the new rules.

The Minister for Small Business has written to state and territory consumer affairs ministers asking them to agree to the changes.

The announcement was welcomed by the Australian Chamber of Commerce and Industry, and small business association COSBOA.

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