Authors: Judith Miller & Bindhu Holavanahalli
A Bill to extend the unfair contract protections of the Australian Consumer Law (ACL) for consumer contracts to standard form small business contracts passed the Senate yesterday with major amendments which will substantially expand the operation of the regime.
The Senate amended the Bill to extend the definition of ‘small business contract’ by increasing the limit on the upfront price payable under the contract. A contract will now be a small business contract if it satisfies the following conditions:
(a) at the time the contract is entered into, at least one party to the contract is a small business being a business that employs fewer than 20 persons; and
(b) either:
a. the upfront price payable under the contract is less than $300,000 (previously $100,000); or
b. if the contract has a term of more than 12 months, the upfront price payable is less than $1,000,000 (previously $250,000).
The Senate has also amended the Bill so that it will come into effect 12 months after the Royal Assent (previously 6 months).
The amendments are now due to be considered by the House of Representatives.
For more information on the new unfair contract protections, please refer to our previous update.
If you would like further information on the material in this article, please contact Judith Miller, National Practice Leader – Commercial.