COAG Decision Regulation Impact Statement – Consumer Affairs Australia and New Zealand
On 13 April 2015 the Legislative and Governance Forum on Consumer Affairs endorsed the extension of the consumer unfair contract term protections for standard form contracts to small businesses. Previous research has found that unfair terms in standard form contracts can cause detriment to consumers, who often do not fully understand or have the bargaining power to negotiate these terms. Consequently, since 2010 unfair terms in standard form consumer contracts have been regulated by provisions in the Australian Consumer Law and the Australian Securities and Investments Commission Act 2001. The Decision Regulation Impact Statement (RIS) prepared by the Commonwealth Treasury identifies that small businesses may face similar problems as consumers when engaging in contracts. Small businesses may encounter the same lack of scope for negotiation, or may have a lack of time and access to technical or legal advice. The Decision RIS concludes that the introduction of an Unfair Contract Terms regime for low-value standard form contracts offered to small businesses would result in fairer contract terms and a potentially more efficient distribution of risk. The Decision RIS prepared on behalf of Consumer Affairs Australia and New Zealand was assessed as compliant with the COAG RIS requirements by the Office of Best Practice Regulation.
