Breaking news: That’s unfair! is now legitimate grounds to void a contract.
Want to know what the new Unfair Contract laws are all about? Read on. We’ve got your business behind, covered.
As of 12 November 2016, the laws around new contracts, renewed existing contracts, and terms varied within existing contracts have been updated under the Australian Consumer Law.
And these new laws state that contracts are void if deemed ‘unfair’. (We’ll get into definitions, later).
First, it’s important to know…
Yes – if you’re dealing with small business contracts (including “standard form” contracts).
Wait, what’s a small business contract again?
Under the new laws, it’s defined as a contract for a supply of goods or services, or a sale or grant of an interest in land where:
A ‘standard form contract’ is a contract where:
Is that you? If so, you’ll likely be asking…
Under s 24(1) of the Australian Consumer Law, a contract will be unfair if it:
Examples of unfair terms may include:
And the most important part…
If you’ve entered into a standard form contract with an unfair clause, the court will treat the clause as void. That is – as if it never existed at all. Just like that!
However, (and here’s where it gets serious) if the clause is so essential that the rest of the contract can’t operate with it, the court will deem the whole contract void.
In practical terms, this means that any protection or rights you had under the contract will not only be lost, but considered to have never existed at all.
If you use standard form contracts or template contracts consider:
If the answer is “no” or “not really”, then it’s time to review the terms.
If you’re having trouble getting across the new laws, or aren’t sure whether your contract is “unfair” – get in touch 02 8880 9383 or metis_at_metislaw.com.au.