By and -

Snapshot

  • In the recent decision of Australian Competition and Consumer Commission v JJ Richards & Sons Pty Ltd, the Federal Court applied for the first time new laws that protect small businesses from unfair contract terms.
  • A term of a standard form contract will be ‘unfair’ if it is one-sided and excessive, i.e. it creates a ‘significant imbalance’ between the parties, is not reasonably necessary to protect the benefiting party’s legitimate interests and would cause detriment to the other party.
  • The case serves as a warning to all businesses to review their standard form contracts with small businesses and to consider revising any clauses that may be challenged as ‘unfair’.

Applying for the first time new laws that protect small businesses from unfair contract terms, the Federal Court in Australian Competition and Consumer Commission v JJ Richards & Sons Pty Ltd [2017] FCA 1224 (‘JJ Richards & Sons’) has declared, by consent, that eight terms in the standard form contract used by JJ Richards & Sons Pty Ltd to engage small businesses are unfair and therefore void.

The outcome serves as a warning to all businesses to review their standard form contracts with small businesses and to consider revising any clauses that may otherwise risk being rendered void and unenforceable if challenged as ‘unfair’ under the unfair contract laws.

You've reached the end of this article preview

There's more to read! Subscribe to LSJ today to access the rest of our updates, articles and multimedia content.

Subscribe to LSJ

Already an LSJ subscriber or Law Society member? Sign in to read the rest of the article.

Sign in to read more