Strengthening unfair contract term protections for consumers and small businesses

The Government has today released a draft Bill to strengthen unfair contract term (UCT) protections for consumers and small businesses.

This is a media release from The Hon Michael Sukkar MP, Assistant Treasurer, Minister for Housing and Minister for Homelessness, Social and Community Housing. It was originally published on 23rd August, 2021.

The exposure draft Bill proposes reforms to the Australian Consumer Law and the Australian Securities and Investments Commission Act 2001 to help reduce the prevalence of unfair terms in standard form contracts, and improve consumer and small business confidence when entering into standard form contracts.

Key reforms include:

  • prohibiting the use, application and reliance on an unfair term;
  • providing courts with the power to impose a financial penalty for a contravention;
  • expanding the protections to capture a larger number of small businesses; and
  • creating a rebuttable presumption that a term is unfair if a court has already found a similar term used in similar circumstances is unfair.

The consultation on the draft Bill follows an earlier consultation process on options to enhance the UCT protections.

The exposure draft Bill and explanatory memorandum are available on the Treasury website. Submissions close on 20 September 2021.

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