From 9 November 2023, changes to the Australian Consumer Law now ban proposing, using, or relying on unfair contract terms in standard form contracts with consumers and small businesses.
Prior to this a Court could only declare specific terms of a contract unfair and therefore void but they were not prohibited, and the Court could impose any penalties. As of Nov 2023, Courts can impose substantial penalties on businesses and individuals who include unfair terms in their standard form contracts.
The maximum financial penalties for businesses under the new unfair contract terms law are the greater of:
- three times the value of the “reasonably attributable” benefit obtained from the conduct, if the court can determine this; or
- if a court cannot determine the benefit, 30 per cent of adjusted turnover during the breach period.
The maximum penalty for an individual is $2.5 million.
The changes apply to:
- standard form contracts made or renewed on or after 9 November 2023.
- a term of a standard form contract that is varied or added on or after 9 November 2023.
Where a term of a contract is varied or added on or after 9 November 2023, the changes relevant to deciding whether a contract is a standard form contract apply to the whole contract.
The definition of a small business contract also changed. The protections now cover businesses with 100 or fewer employees or that make less than $10 million in annual turnover and apply irrespective of the value of the contract.
ACCC has also provided extensive information on what this means in your contract negotiations and how to bring this to the attention of processors. There is a whole website HERE and a handy printable guidance note Unfair contact terms practical tips for businesses
NOTE THAT ALL POULTRY MEET GROWING CONTRACTS ARE CONSIDERED TO BE “STANDARD FORM” CONTRACTS
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