It’s no secret that the Australian Consumer Law protects consumers and small businesses from unfair terms in contracts. For example, earlier this year, Uber Eats was forced to remove standard terms from their contracts, including clauses which gave Uber the ability to hold restauranteurs liable for cold or ‘substandard’ food deliveries and allowed Uber to unilaterally vary contract terms at any time. 

As it stands, ‘unfair contract terms’ are invalid and cannot be legally enforced.  However, there are no real financial penalties to deter large corporations like Uber from relying on unfair terms until they are caught out.

This position looks set to change in 2021 with both federal and state governments proposing amendments to current laws to strengthen protections by formally penalising parties who seek to incorporate unfair contract terms.  Under the proposed amendments:

  • unfair contract terms are set to become unlawful;
  • civil penalties will apply (however, the amount of the potential penalties is not yet known);
  • the definition of `small business’ contracts will be expanded; and
  • `standard form’ contracts and protections will be further clarified.

Although these reforms are currently pending approval, the Government’s intention to impose penalties and provide confidence to consumers and small businesses is abundantly clear.

For more information, head to the following link on the ACCC website: https://www.accc.gov.au/business/business-rights-protections/unfair-contract-terms