Are you up to date on unfair contracts legislation for small business?

New Australian Consumer Law came into effect from 12th November 2016 that makes unfair contract terms forced upon small businesses by larger organisations void. What it means is that if a small business is handed a standard form contract from a large organisation with clauses that are unfair to them and they are given no opportunity to negotiate them, then these clauses may be unenforceable. This legislation is aimed at providing small businesses protection against standard “take it or leave it” contracts when the size and negotiating power of the two companies is out of balance.

The criteria as detailed by the ACCC for the types of contracts that the legislation is applicable to are:

  1. The contract must be meet the following conditions to be considered:
  • it is for the supply of goods or services or the sale or grant of an interest in land
  • at least one of the parties is a small business (employs less than 20 people, including casual employees employed on a regular and systematic basis)
  • the upfront price payable under the contract is no more than $300 000 or $1 million if the contract is for more than 12 months.
  1. The contract is entered into or varied on or after 12 November 2016.
  2. The contract is offered to the small business as a “take it or leave it” contract with no negotiation of contract terms.

Unfair clauses may include:

  • terms that enable one party (but not another) to avoid or limit their obligations under the contract.
  • terms that enable one party (but not another) to terminate the contract.
  • terms that penalise one party (but not another) for breaching or terminating the contract.
  • terms that enable one party (but not another) to vary the terms of the contract.

If a contract meets the above criteria, then any unfair clauses within it, as determined by a court or tribunal, will be void.

Unfortunately, many “take it or leave it” contracts with unfair clauses are still being commonly offered.

For further information:

https://www.accc.gov.au/system/files/Unfair%20contract%20terms%20-%20A%20guide%20for%20businesses%20and%20legal%20practitioners.pdf

Are your security systems ready for power blackouts this summer?

There have been many warnings about the possibility of power blackouts in Australia this coming summer so now is a good time to check that your security systems won’t fail if blackouts occur.

These are a few things to consider:

  1. When is the last time that the batteries were changed in field control equipment? If the security systems are being maintained in accordance with Australian Standard AS/NZS 2201.1:2007 Intruder alarm systems, then each battery will be legibly and durably marked with the month and year of installation.
  2. When is the last time that access control and security alarm systems were tested on battery power alone for an extended period? If the batteries are to maintain power to their associated equipment for eight hours, then the test should be for this period. When batteries fail, access control doors unlock.
  3. When is the last time the UPS was tested? The only true test is to shut off power to the building in a controlled manner and see that everything still operates. Switching off the input power to the UPS alone will not identify if any equipment has been incorrectly connected to non-UPS power.
  4. When is the last time that generator power was tested and refueled? Generators often fail when they have insufficient fuel.
  5. If a power outage extends for a longer period than batteries, UPS and /or generators have been designed for, what are the contingency plans for events such as electrically locked doors unlocking, camera surveillance turning off, alarm systems failing etc.? How are the assets and information within the facility to be protected? Providing security guards may be a response, but if an extended power blackout is widespread, then the demand for guards may be higher than the available supply.