ACCC Deputy Chair Dr Michael Schaper has explained that ”the new law will apply when a term in a small business standard form contract:
- causes a significant imbalance in the parties’ rights and obligations
- isn’t reasonably necessary to protect the legitimate interests of the party advantaged by the term, and
- causes financial or other detriment (such as delay) to a small business if it were relied on.”
The law will apply to standard form contracts entered into or renewed on or after 12 November 2016:
- for the supply of goods or services (or the sale or grant of an interest in land);
- where at least one of the parties is a small business (i.e. employs less than 20 people, including casual employees); and
- where the upfront price payable under the contract is no more than $300 000 or $1 million if the contract is for more than 12 months.
Please contact us for more information or if you are concerned about your standard form contracts.