New unfair contract term ban and $50 million penalties now in effect

Legislation imposing significant penalties on individuals and organisations for using unfair terms in standard-forms contracts has come into effect.

Australian companies previously had eight weeks to strip unfair contract terms from the standard form contracts they offer to small business suppliers or run the risk of ramped-up financial penalties handed down by the courts.

The Australian Competition and Consumer Commission (ACCC) had reminded companies that updated legislation, designed to protect small businesses and consumers from lopsided and detrimental business arrangements, will come into effect on November 9.

The legislation, which passed into law late last year, will impose dramatic maximum penalties on organisations using unfair terms in standard-form contracts.