The Government has introduced the Treasury Laws Amendment (Enhancing Tax Integrity and Supporting Business Investment) Bill 2022 into the House of Representatives.
The Bill proposes to (among other things) introduce a civil penalty regime prohibiting the use of unfair contract terms in standard form contracts.
If legislated the Bill would amend the Competition and Consumer Act 2010 (Cth), the Australian Consumer Law and the Australian Securities and Investments Commission Act 2001 (Cth)
- prohibiting the proposal of, use of, application of, or reliance on, unfair contract terms in a standard form consumer or small business contract;
- creating new civil penalty provisions for breaches of the prohibitions
The amendments also expand the class of contracts that are covered by the unfair contract terms provisions.
This Schedule expands the class of contracts that are covered by the unfair contract terms provisions by:
- increasing the small business definition thresholds (so that the regime captures an expanded class of small business standard form contracts); and
- removing the contract value threshold for contracts under the ACL and raising the value threshold for contracts regulated by the ASIC Act (so that the regime captures an expanded class of small business standard form contracts).
Under the ACL, the unfair contract terms protections will apply to a small business contract if one party to the contract is a business that employs fewer than 100 persons or has a turnover for the last income year of less than $10,000,000.
Under the ASIC Act, the protections will apply to a small business contract if the upfront price payable does not exceed $5,000,000, and one party to the contract employs fewer than 100 persons or has a
turnover for the last income year of less than $10,000,000.
Under both the ACL and ASIC Act part time employees are to be counted as an appropriate fraction of a full-time equivalent employee.
These amendments will commence 12 months after the Bill receives Royal Assent.
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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.