The Australian, September 7, 2017
Waste management firm JJ Richards is the first big company to land in court for allegedly breaching new unfair contract laws in its dealings with small business.
In an action filed today, the ACCC is seeking declarations that the terms are unfair and hence void and is seeking injunctions to stop the company from relying on the terms.
The new law came into effect last November after first being suggested by now Opposition Treasurer Chris Bowen back in 2009 when he was the minister responsible for the ACCC.
His successor, Craig Emmerson, canned the changes but assistant treasurer Bruce Billson resurrected them.
In essence, the changes extend to small business the unfair contract terms which have been on the books for consumers for some time.
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In its statement on the legal action, ACCC Commission Michael Schaper said “Where we identify large operators, like JJ Richards, using unfair contract terms that cause harm to small businesses, we will take appropriate enforcement action.”
He cited eight provisions where JJ Richards allegedly breached the provisions.
- 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; and
- preventing customers from terminating their contracts if they have payments outstanding and entitles JJ Richards to continue charging customers equipment rental after the termination of the contract.
Small business ombudsman Kate Carnell has used the legal changes to ensure the big banks played by the new rules.
The law was passed 12 months before it came into effect last November to give business time to rejig its contracts to ensure compliance.