Contracting with small businesses: include unfair terms in your standard form contracts at your peril
Anne FreemanThe APPEA Journal 58(2) 550-552 https://doi.org/10.1071/AJ17060
Accepted: 16 February 2018 Published: 28 May 2018
Abstract
Many companies operating in the oil and gas space might think that the Australian Consumer Law has little impact on them. However, in November 2016, amendments were made to the Competition and Consumer Act extending the unfair contract terms regime under that legislation beyond dealings with individual consumers to small businesses.
This reform has potential far-reaching consequences for companies in the oil and gas sector which use standard form contracts with suppliers of goods and services. A standard form contract is one that is prepared by one party to the contract where the other party has little or no opportunity to negotiate the terms. If the contract counterparty is a small business (employing less than 20 employees) and if the upfront price is no more than $300 000 or $1 million if the contract is for more than 12 months, it is caught by this regime. If the standard form contract contains terms which are unfair, those terms may be declared void and there may be other consequences, including orders for monetary redress, penalties and the entire contract being avoided.
This extended abstract will explain the business to business unfair contracts regime, including what contracts it affects, which contracts and terms are excluded from the regime, and it will examine, by way of some case studies, the types of terms which have been found to be unfair.
Keywords: contracts, oil and gas goods and services, small business contracts, unfair contract terms.
Anne Freeman is a partner of national law firm, Piper Alderman, which has a long history of assisting clients in the energy and resources sector. She specialises in dispute resolution and commercial and insurance litigation. For over 20 years Anne has represented clients in a range of industries and sectors, including energy and resources. She regularly advises on joint venture issues, and contractual and other disputes. Anne assists clients with dispute resolution strategies, which include alternative dispute resolution processes and litigation ranging from the Local Court to the High Court. She has also represented clients in a Royal Commission. In 2015, Anne joined the Board of the Energy Policy Institute of Australia, an apolitical, not for profit, energy policy body. She is also on the Editorial Panel for Lexis Nexis’ publication, Competition and Consumer Law News, to which she regularly contributes. Anne has also worked at international law firms in London and Sydney. She has a first class Honours degree in Law from the University of Adelaide, and a Bachelor of Arts (Jurisprudence). |
References
Australian Competition and Consumer Commission v JJ Richards & Sons Pty Ltd [2017] FCA 1224.Competition and Consumer Act, 2010 (Cth).
