In December last year, the Government published a Discussion Paper canvassing options for the introduction of prohibitions on unfair contract terms in business-to-business dealings and unfair conduct. We released an update on this at the time, which you can read here.
The proposed prohibitions will be included in an updated Fair Trading Act. The Fair Trading Amendment Bill will:
- prohibit unconscionable conduct in trade. Unconscionable conduct is serious misconduct that goes far beyond being commercially necessary or appropriate;
- extend the Fair Trading Act’s existing protections against unfair contract terms in standard form consumer contracts, to also apply to small trade contracts. At this stage, these are contracts between businesses that form part of trading relationships with an actual or expected total value of less than $250,000 in any 12 month period; and
- strengthen the ability of consumers to require uninvited direct sellers to leave or not enter their property, including through the use of generally-worded written notices.
The Fair Trading Amendment Bill had its First Reading in Parliament on Wednesday night. It has now been referred to the Economic Development, Science and Innovation Select Committee for consideration.
The Committee has called for submissions on the Bill, with all submissions due at midnight on Friday 27 March 2020. This is a relatively tight timeframe on what is a very important area for most businesses, and we recommend that businesses consider whether they wish to make submissions.
If you would like to talk to one of our team around these or any other reforms, including our submissions on the Government's Discussion Document for these proposals, please get in touch with our one of our experts.