Budget 2014: Unfair contract provisions extended to small business

Small businesses are going to be protected from unfair contracts imposed by big business.

Small Business Minister Bruce Billson has promised the extension of unfair contract protections for small business for some time and the budget delivers on this.

Small business will be able to access the same unfair contract protections currently available to consumers under the Australian Consumer Law.

The scheme will cost $1.4 million and will include legislative reforms to make unfair terms in standard form contracts with small business void.

Once the laws come into force, any remaining money will be used to provide education and compliance activities to small business.

“This will help to provide a level playing field for small businesses and enhance the welfare of Australians by increasing small business certainty, confidence and productivity,” Billson said in a statement accompanying the budget papers. 

Billson previously told SmartCompany he finds small businesses often have to negotiate with big business on a take it or leave it basis under standard form contracts that place a disproportionate burden on one party over the other.

“What happens with standard form contracts is businesses use them irrespective of the scale or legal status of the person they are contracting with, consumers have certain protections but small businesses have no more power to negotiate and no access to those unfair contract provisions,” he said.