Unfair terms and legitimate business interests in standard form small business contracts

Abstract

The extension of the unfair contract terms regime in the Australian Consumer Law to small businesses has been robustly enforced by the ACCC and ASIC. The terms targeted by the regulators mirror those that have been found to be unfair in standard form contracts with consumers, including unfettered unilateral variation clauses, rigid renewal clauses and overly broad termination for default clauses. However, the justifications for these terms in business transactions may differ from consumer contracts, possibly making some such terms ‘reasonably necessary to protect the legitimate interests’ of the party relying on it. Nonetheless, most judgments on the regime involve declarations by agreement ..