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ACCC puts B2B contracts on notice

The ACCC has announced an increased focus on unfair business contract terms, following the introduction of business-to-business laws in November last year.

Since the introduction of the laws which relate to franchising and other types of business contracts, the ACCC has received 48 complaints about unfair business contract terms, some of which resulted in removal or changing of the unfair terms, however according to the ACCC some have not.

ACCC deputy chair Dr Michael Schaper said enforcement actions would be taken this year.

“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,” he said.

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

“We’re concerned 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 ACCC has said there were clauses it had identified, in general, as being potentially unfair yet continued to be used in standard form contracts by businesses.

These included terms such as an unreasonable ability to cancel or end an agreement; potentially broad and unreasonable powers to protect businesses 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; and an unreasonable ability to limit or prevent small businesses from exiting their contracts.

One business that has been flagged by its franchisees is Caltex Australia. C&I Week recently received information from legal representation for a number of Caltex franchisees that a complaint had been lodged with the ACCC about unfair contract terms.

Business owners who believe they are subject to unfair contract terms should contact the ACCC to make a report.

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