Are you a franchisor? ...or a financial services provider with
authorised representatives? ...or a credit provider? ...or a
service provider? Do you have a standard form
contract that you wheel out when you take on board a new
business partner or customer?
If your new business partner or customer employs less than 20
people, and the up-front payment under the contract is less than
$300,000, or the payments to you under the contract over 12 months
are less than $1 million, your standard form contract (or a
variation of an existing contract) entered into after that date
must comply with the new laws.
Contracts which are pre-prepared by one party and put to the
other on a "take it or leave it" basis, where there is no
reasonable opportunity to negotiate the terms, will be vulnerable
if the contract contains unfair terms. Unfair terms may
terms which allow you to limit or avoid your obligations, but
do not make the same provision for the other party;
terms which allow you to terminate the contract, but do not
make the same provision for the other party;
terms which allow you to vary the contract, but do not make the
same provision for the other party;
terms which unreasonably penalise the other party for breach or
termination of the contract.
Your unfair contract could be challenged in a court or tribunal,
and any unfair provisions may be held to be not binding – and
you may have a costs order made against you. You might even attract
the scrutiny of the ACCC.
Holley Nethercote's commercial lawyers can help
you ensure that those contracts which you have been using are
refreshed so that you will not breach the new laws, or that any new
contracts comply with the legislation and help keep you on the
right side if a dispute arises.
Contact Tim Dixon, Special Counsel and head of our Commercial
Department, if you would like any advice or review of your existing
standard form contracts, or if you need new contracts to be ready
for the changes effective on 12th November 2016.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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