The Government has introduced the Treasury Laws Amendment (Enhancing Tax Integrity and Supporting Business Investment) Bill 2022 into the House of Representatives.

The Bill proposes to (among other things) introduce a civil penalty regime prohibiting the use of unfair contract terms in standard form contracts.

If legislated the Bill would amend the Competition and Consumer Act 2010 (Cth), the Australian Consumer Law and the Australian Securities and Investments Commission Act 2001 (Cth)

• prohibiting the proposal of, use of, application of, or reliance on, unfair contract terms in a standard form consumer or small business contract;
• creating new civil penalty provisions for breaches of the prohibitions

The amendments also expand the class of contracts that are covered by the unfair contract terms provisions.

This Schedule expands the class of contracts that are covered by the unfair contract terms provisions by:

• increasing the small business definition thresholds (so that the regime captures an expanded class of small business standard form contracts); and
• removing the contract value threshold for contracts under the ACL and raising the value threshold for contracts regulated by the ASIC Act (so that the regime captures an expanded class of small business standard form contracts).

Under the ACL, the unfair contract terms protections will apply to a small business contract if one party to the contract is a business that employs fewer than 100 persons or has a turnover for the last income year of less than $10,000,000.

Under the ASIC Act, the protections will apply to a small business contract if the upfront price payable does not exceed $5,000,000, and one party to the contract employs fewer than 100 persons or has a
turnover for the last income year of less than $10,000,000.

Under both the ACL and ASIC Act part time employees are to be counted as an appropriate fraction of a full-time equivalent employee.

These amendments will commence 12 months after the Bill receives Royal Assent.

If you found this article helpful, then subscribe to our news emails to keep up to date and look at our video courses for in-depth training. Use the search box at the top right of this page or the categories list on the right hand side of this page to check for other articles on the same or related matters.