Standard form contracts can provide a cost-effective way for many businesses to contract on consistent terms across large volumes of projects and clients. Consult Australia’s Consultant Contract and Subconsultant Contract are considered standard form contracts.
For many years the Australian Consumer Law has included protections for consumers and small businesses against ‘unfair contract terms’ in standard form contracts. But updates to the protections have just come into force, after being agreed by Commonwealth, state and territory ministers in November 2020.
“The change has been in the pipeline for more than three years,” says Consult Australia’s Head of Policy and Government Relations, Kristy Eulenstein.
“Essentially, the definition of a ‘small business’ – and therefore who is protected from unfair contract terms – has been broadened. There are also better enforcement mechanisms and penalties. This is all good news for Consult Australia’s small business members.”
More information about the changes is available at the ACCC website. The ACCC provides tips for businesses to consider when reviewing their contracts.
Since the change, some Consult Australia members have been approached by larger business partners, seeking data on staffing and turnover, Kristy says. “This is likely because the larger business wants to see if you now fit into the protected category if you previously didn’t.”
“The actual protections haven’t changed and Consult Australia does not expect to make any changes to the Consult Australia Contract Suite,” Kristy adds.
“In drafting our Contract Suite, we have ensured that the standard terms are balanced between the parties. We also provide information about the unfair contract term protections in the Advisory Note.
“If you make changes to our standard template, please consider the impact, if any, relevant to the unfair contract term protections. Provided that the standard contract is balanced, and you are not seeking to avoid your obligations under the Australian Consumer Law, you should be fine.”