The Federal Government recently released draft laws which will extend the consumer unfair contract protections to small businesses. If implemented, terms in standard form contracts with small businesses which are found to be unfair will be struck out.
The new laws are likely to have a significant impact in the transport sector, where standard form contracts are common and many participants will fall within the definition of ‘small businesses’. Many settled clauses in such contracts may be considered unfair under the new laws. If struck out, road transport and logistics providers may find themselves unable to rely on many of the protections that they presently take for granted. Conversely, embattled small business road transport and logistics providers may be able to apply to strike out unfair terms in their service contracts with principals.
•at least one party is a ‘small business’; and
•prepared by one party prior to discussions with the other;
•presented on a ‘take it or leave it’ basis;
•presented without any effective opportunity to negotiate its terms;
•causes a significant imbalance in the parties’ rights and obligations under the contract;
•would cause detriment (whether financial or otherwise) to a party if it were to be relied on; and
•terms that seek to exclude or limit liability, such as the standard weight/package limitations;
•terms that impose a time bar on the bringing of claims, such as the standard 9 month time bar provisions - Indeed, in a 2003 case under similar unfair contracts legislation in Singapore, it was held that the 9 month time bar clause contained in the Singapore Freight Forwarders Association Standard Trading Conditions was unfair and not able to be relied upon by the freight forwarder in question; and
