Home topics news Credits: Gabrielle Henderson News News ALP intends to strengthen unfair contract terms protection for SMEs, consumers Yajush Gupta July 28, 2022 To increase consumer and small business protections against unfair contract terms (UCT), the government will propose legislation during the upcoming sitting period. “Small businesses and consumers often lack the resources and bargaining power to review and negotiate terms in standard form contracts effectively. Existing laws haven’t stopped using unfair terms, which remain prevalent in standard form contracts,” per the statement. The revisions would include civil penalty clauses prohibiting the inclusion of unfair conditions in standard form contracts and their reliance on them. This will allow a regulator to seek a civil penalty from a court. Furthermore, a greater percentage of small business contracts will be protected. This will be accomplished by raising the small business eligibility level for protections from less than 20 to less than 100 employees and adding an annual turnover criterion of less than $10 million as an alternative threshold for evaluating eligibility. What are the current UCT rules? According to Australia’s competition and consumer commission, the UCT regime is intended to prevent powerful big businesses from including UCT in agreements with consumers or small enterprises. The law applies to standard form 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