Are you doing business with small enterprises? If so you may be at risk for non-compliance under the new UCT reform bill
The Australian Federal Government recently tabled a bill aimed at amending unfair contract terms laws. This UCT reform Bill proposes to significantly increase the maximum penalties under the Competition and Consumer Act 2010 (Cth) (CCA), including the Australian Consumer Law (ACL).
This law applied to all contracts entered into or renewed on or after 12 November 2016, where:
- it is for the supply of goods or services or the sale or grant of an interest in land
- at least one of the parties is a small business (employs less than 100 people, including casual employees employed on a regular and systematic basis)
- the upfront price payable under the contract is no more than $1 million if the contract is for more than 12 months.
Under this bill unfair contract terms would be deemed unlawful and the business proposing or seeking to rely on them would be exposed to the risk of severe penalties under the ACL or the ASIC Act.
Companies can face up to $50 million in fines and have less than 12 months to review all their contracts for any non-compliance.
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