As a business, you may be required to enter into standard form contracts with other businesses for goods (e.g. equipment, stock) and services (e.g. internet, banking, search engine optimisation services). You may also choose to use standard form contracts when dealing with your customers.
It’s in your interests to make sure any other businesses you deal with are genuine and that you carefully review any contracts before signing. This may mean researching the business and asking them to back up any claims they make, checking standard form contracts for any unfair terms and getting independent legal advice where appropriate.
Under the Australian Consumer Law (ACL), certain standard form contracts cannot contain terms that:
- cause a significant imbalance in the parties' rights and obligations, and
- are not reasonably necessary to protect the legitimate interests of the party advantaged by the term, and
- would cause financial or other detriment to the party if it were applied or relied upon.
Only a court or tribunal (not the ACCC) can decide that a term is unfair. If a term is found to be unfair, it will be void. This means that it is treated as if it never existed.
For more information about unfair contract terms, visit the Unfair contract terms page when dealing with other businesses and Unfair business practices page when dealing with your customers.
Watch our video to learn simple steps to protect yourself when purchasing from another business.