![GOLD COAST CORPORATE SERVICES TEAM CONTACTS
Ken Petty Jake Leavesley Mary Grant Erin Tanner Courtney Dalton
MANAGING PARTNER SENIOR ASSOCIATE ASSOCIATE LAWYER CLERK
T: +61 7 5553 9524 T: +61 7 5553 9507 T: +61 7 5553 9421 T: +61 7 5553 9545 T: +61 7 5553 9592
ken.petty@minterellison.com jake.leavesley@minterellison.com mary.grant@minterellison.com erin.tanner@minterellison.com courtney.dalton@minterellison.com
Developing InSight
7 March 2017
Infrastructure charging under the Planning Act: Same, same (mostly)
Key tips
Its one year since small business contracts became
subject to the unfair contracts terms (UCT) provisions in
the Competition and Consumer Act 2010, but there is
still confusion over how the UCT provisions apply in a
business-to-business context. Recently, the Federal
Court has shed some light on this in an enforcement
action against JJ Richards & Sons Pty Ltd for over
20,000 non-compliant contracts.
Unfair contracts wayfinder
Included with this update is a wayfinder for businesses
and lawyers to navigate the UCT provisions and ensure
their standard form contracts do not contain any UCTs.
If you require any further information or assistance in
relation to the Acts, or if you would like to understand
how to minimize legal risks, please give us a call.
What were the changes?
The Competition and Consumer Act 2010 and the ASIC Act
2001 (the Acts) contain mirror regimes which protect
consumers from UCTs. On 12 November 2016, the
UCT provisions under the Acts were extended to protect
small businesses as well as consumers.
This impacts a considerable amount of contracts, including
contracts for goods or services, leases, guarantees, licences,
general commercial agreements, construction contracts and
loans.
Difficulties with applying the legislation
The UCT provisions in the Acts are broadly drafted and can
be difficult to envisage in real terms or in a business context.
Compounding this, the Acts transfer a new level of risk onto
the party preparing the standard form contract (the drafter)
to ensure it is UCT free, as well as the burden of proving
that the terms are fair if the contract is ever disputed by the
counterparty (the small business).
ACCC v JJ Richards & Sons Pty Ltd [2017]
This was the first enforcement action brought by the ACCC in
relation to the UCT provisions, making it an important test
case. The ACCC argued that the standard form contracts
under which JJ Richards provides waste management
services to its small business customers contained eight
UCTs. The Federal Court agreed, ordering those eight terms
were void and unenforceable.
The case confirms that the courts will likely adopt a broad
approach to interpreting the UCT provisions, ensuring more
contracts are subject to the fairness requirement.
*Disclaimer
The information contained in this update is intended as a guide only.
Professional advice should be sought before applying any of the
information to particular circumstances. While every reasonable care
has been taken in the preparation of this update, MinterEllison does
not accept liability for any errors it may contain.
Emerging issue: unfair contracts
Federal Court provides clarity for businesses transitioning into the unfair contracts regime
16 November 2017
Takeaways
If contracting regularly with small businesses,
drafters should scrutinize any standard form
contracts to ensure they do not contain any
particularly one-sided terms, for example:
automatically locking the small business into
a renewed term;
enabling the drafter (but not the small
business) to vary or terminate the contract;
limiting the ability of the small business to
address the drafters failure to perform its
obligations; or
creating an unlimited indemnity in favour of
the drafter, even where loss incurred is not
the small businesss fault.
Terms like these must be carefully drafted to avoid
being deemed unfair and struck out by a court.](https://image.slidesharecdn.com/uctwayfinder-newguidanceforbusinessesstilltransitioningtotheunfaircontractsregime-171117061331/85/UCT-wayfinder-new-guidance-for-businesses-still-transitioning-to-the-unfair-contracts-regime-1-320.jpg)
UCT wayfinder - new guidance for businesses still transitioning to the unfair contracts regime
- 1. GOLD COAST CORPORATE SERVICES TEAM CONTACTS Ken Petty Jake Leavesley Mary Grant Erin Tanner Courtney Dalton MANAGING PARTNER SENIOR ASSOCIATE ASSOCIATE LAWYER CLERK T: +61 7 5553 9524 T: +61 7 5553 9507 T: +61 7 5553 9421 T: +61 7 5553 9545 T: +61 7 5553 9592 ken.petty@minterellison.com jake.leavesley@minterellison.com mary.grant@minterellison.com erin.tanner@minterellison.com courtney.dalton@minterellison.com Developing InSight 7 March 2017 Infrastructure charging under the Planning Act: Same, same (mostly) Key tips Its one year since small business contracts became subject to the unfair contracts terms (UCT) provisions in the Competition and Consumer Act 2010, but there is still confusion over how the UCT provisions apply in a business-to-business context. Recently, the Federal Court has shed some light on this in an enforcement action against JJ Richards & Sons Pty Ltd for over 20,000 non-compliant contracts. Unfair contracts wayfinder Included with this update is a wayfinder for businesses and lawyers to navigate the UCT provisions and ensure their standard form contracts do not contain any UCTs. If you require any further information or assistance in relation to the Acts, or if you would like to understand how to minimize legal risks, please give us a call. What were the changes? The Competition and Consumer Act 2010 and the ASIC Act 2001 (the Acts) contain mirror regimes which protect consumers from UCTs. On 12 November 2016, the UCT provisions under the Acts were extended to protect small businesses as well as consumers. This impacts a considerable amount of contracts, including contracts for goods or services, leases, guarantees, licences, general commercial agreements, construction contracts and loans. Difficulties with applying the legislation The UCT provisions in the Acts are broadly drafted and can be difficult to envisage in real terms or in a business context. Compounding this, the Acts transfer a new level of risk onto the party preparing the standard form contract (the drafter) to ensure it is UCT free, as well as the burden of proving that the terms are fair if the contract is ever disputed by the counterparty (the small business). ACCC v JJ Richards & Sons Pty Ltd [2017] This was the first enforcement action brought by the ACCC in relation to the UCT provisions, making it an important test case. The ACCC argued that the standard form contracts under which JJ Richards provides waste management services to its small business customers contained eight UCTs. The Federal Court agreed, ordering those eight terms were void and unenforceable. The case confirms that the courts will likely adopt a broad approach to interpreting the UCT provisions, ensuring more contracts are subject to the fairness requirement. *Disclaimer The information contained in this update is intended as a guide only. Professional advice should be sought before applying any of the information to particular circumstances. While every reasonable care has been taken in the preparation of this update, MinterEllison does not accept liability for any errors it may contain. Emerging issue: unfair contracts Federal Court provides clarity for businesses transitioning into the unfair contracts regime 16 November 2017 Takeaways If contracting regularly with small businesses, drafters should scrutinize any standard form contracts to ensure they do not contain any particularly one-sided terms, for example: automatically locking the small business into a renewed term; enabling the drafter (but not the small business) to vary or terminate the contract; limiting the ability of the small business to address the drafters failure to perform its obligations; or creating an unlimited indemnity in favour of the drafter, even where loss incurred is not the small businesss fault. Terms like these must be carefully drafted to avoid being deemed unfair and struck out by a court.
- 2. Unfair contracts wayfinder A guide to navigating the unfair contracts provisions of the Competition and Consumer Act 2010 and the ASIC Act 2001 (the Acts) when contracting with small businesses. Note: the Acts generally do not apply to government bodies, unless the government body is carrying on a business.