Small business owners affected by unfair contract terms – especially those detrimental to their livelihoods – could benefit from a review of current legislation.
Small businesses potentially face the same issues as individual consumers when dealing with larger businesses but unfortunately are not afforded the same level of protection under the Competition and Consumer Act 2010 (Cth).
A Federal Government review is currently considering whether this protection should be extended to small businesses.
To help inform its submission to the review, the Small Business Development Corporation (SBDC) is exploring the use of unfair terms in standard contracts (such as those for telephone services and utilities) and wants to hear the views and experiences of small business owners.
Small Business Commissioner David Eaton said the SBDC had long advocated that small businesses should be treated the same way as individual consumers under certain aspects of the Australian Consumer Law, including provisions prohibiting the use of unfair contract terms.
“Time and again we have heard from small businesses subject to unfair terms in their contracts with larger businesses,” he said.
“Common examples found in standard contracts include automatic rollover of contracts when they expire, excessive cancellation fees relative to the value of the contract and allowing one party to unilaterally change a major term of the contract without consulting the other party.
“Small businesses subject to these types of terms can often experience significant detriment – financial loss, damage to business relationships and the time and stress expended by business owners trying to negotiate fairer outcomes.
“To explore this issue further, we are calling on small businesses in WA to complete our short online survey to tell us about their experiences and opinions on unfair contract terms.
“My submission to the Federal Government will be strengthened by including the feedback from business owners who are dealing with these inequities on a daily basis.”
The five-minute SBDC survey at www.smallbusiness.wa.gov.au/contract-terms-survey is open until 5.00pm, 11 July 2014. All responses will be treated in total confidence, no individuals will be identified and results will be aggregated.
More information is also available through the Federal Government’s Department of Treasury at http://www.treasury.gov.au/ConsultationsandReviews/Consultations/2014/Small-Business-and-Unfair-Contract-Terms.