15 April 2015
Media Release - #2015035, 2015

States and territories commit to unfair contract protections

Another key step has been completed in delivering the Abbott Government’s election commitment to ensure a fair go for Australian small businesses by extending unfair contract term protections.

I am pleased to announce today I have received confirmation of the necessary support from states and territories required under intergovernmental agreements to proceed with legislation to implement this important reform.

This means we are closer to ensuring small businesses have access to a level playing field to grow, invest and create jobs.

The previous Labor government promised to give small businesses the benefit of unfair contract provisions - but without explanation or apology never delivered on that commitment.

This Government is committed to being the positive partner small business and family enterprises need and to working as hard for the success of these enterprises as those in these businesses do.

Like consumers, small businesses often lack the time, legal expertise or bargaining power and have been locked into ‘take it or leave it’ contracts, with little scope to negotiate just and fair terms.

Today marks an important step forward in ensuring strong protections for small businesses when contending with harmful “consumer like” contracts.

The new unfair contract term protections for small business will be available for enterprises of less than 20 employees and for transactions under $100,000 or for multi-year contracts totaling less than $250,000.

The protections will allow the courts to declare void a term within a contract that is unfair. For example, a term that allows a big business to unilaterally change the price or key terms during the course of the contract could be considered unfair.

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.

A new jobs and small business package will also be announced over coming weeks. It will include a small business company tax cut on July 1 – at least as big as the 1.5 per cent already flagged.

The Government is restoring time and resources back to small business to invest in their business success rather than navigating a costly and time consuming maze of red tape.