ACCC launches first small business unfair contracts enforcement
In March 2017, we drew attention to the fact that the ACCC had announced that one of its enforcement priorities for 2017 would be a focus on the unfair contract terms protecting small business.
True to its word, the ACCC has announced that it has instituted proceedings against JJ Richards &Sons Pty Ltd in relation to the terms of its rubbish removal contracts. This is the first time that the ACCC has taken court action to enforce the new laws, which commenced in November 2016.
The allegations of unfairness relate to:
- binding customers to subsequent contracts unless they cancel the contract within 30 days before the end of the term
- allowing JJ Richards to unilaterally increase its prices
- removing any liability for JJ Richards where its performance is “prevented or hindered in any way”
- allowing JJ Richards to charge customers for services not rendered for reasons that are beyond the customer’s control
- granting JJ Richards exclusive rights to remove waste from a customer’s premises
- allowing JJ Richards to suspend its service but continue to charge the customer if payment is not made after seven days
- creating an unlimited indemnity in favour of JJ Richards
- preventing customers from terminating their contracts if they have payments outstanding and entitling JJ Richards to continue charging customers equipment rental after the termination of the contract.
The ACCC is asking the Federal Court to declare that the terms are unfair, which would mean that JJ Richards could not enforce those terms, although the contracts would otherwise remain current.
It’s not too late to do a compliance check of the standard contract terms that your agency uses when dealing with consumers or small business. Contact Melinda Pugh if you would like Crown Law assistance with compliance.