ACCC makes unfair contracts a priority

Unfair contract terms will be a major focus for the Australian Competition and Consumer Commission in 2017.

The ACCC will ensure franchisees and other small businesses receive protection under the new law.

Deputy chair, Dr Michael Schaper, has warned that the watchdog will be taking enforcement action against a number of companies across a range of industries over business-to-business unfair contract terms this year.

The Australian Consumer Law now prohibits unfair contract terms in most of these contracts. Franchising agreements may also be covered by these provisions.

The ACCC is on the watch for franchisors who apply potentially unfair clauses in their agreements, including those that give them:

  • an unreasonable ability to cancel or end an agreement
  • potentially broad and unreasonable powers to protect themselves against loss or damage
  • the ability to unilaterally change the terms of the contract
  • an unreasonable ability to limit or prevent small businesses from exiting their contracts.