We had previously provided an update on the Treasury Legislation Amendment (Small Business Unfair Contract Terms) Bill 2015 which proposed to extend the consumer unfair contract term protections to standard form small business contracts and allow unfair terms to be struck out.
Following consultation on the Bill, the newly appointed Assistant Treasurer, the Hon Kelly O’Dwyer MP, announced that the Government would support proposed amendments of the Greens’ to the financial thresholds of the Bill in the definition of small business contract.
Now, a contract will be a small business contract if:
- at the time the contract is entered into, at least one party to the contract is a small business as defined; and
- either of the following applies:
o the upfront price payable under the contract does not exceed $300,000 (previously proposed as $100,000); or
o the contract has a duration of more than 12 months and the upfront price payable under the contract does not exceed $1,000,000 (previously proposed as $250,000).
It is estimated that the increased coverage of the legislation will increase unfair contract term protections from 80% to 95% of small businesses.
The Bill is currently before Parliament after consideration of feedback received on the proposed legislation. The transition period has been extended from 6 to 12 months with the effective start date anticipated to be mid 2016.
To request a full summary of the issues email us a request at [email protected]
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