Transport and waste sector contract struck down for unfairness

In November 2016, the scope of protections afforded to consumers under the Australian Consumer Law (ACL) was extended to protect small businesses (employing less than 20 persons) from unfair terms in standard form contracts.

Less than one year later, the Federal Court handed down a decision in respect of proceedings brought by the Australian Competition and Consumer Commission (ACCC) against waste management service provider, JJ Richards & Sons Pty Ltd (JJ Richards), for declaratory and injunctive relief on the basis that 26,000 of its contracts with small businesses had unfair termsⁱ.

Terms held by the Court to be unfair included the:

• Automatic renewal clause – This clause bound customers to subsequent contracts, unless JJ Richards cancelled the contract within 30 days before the end of the contract term. The Court observed that the term created a situation where small businesses could inadvertently miss the window for termination or, if JJ Richards