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ARTICLE · 30 OCTOBER 2015

Arming David with a shield: Unfair contract protections for small business

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If you operate a small business, it is important to be aware of these consumer protections when negotiating contracts.

AustraliaCorporate/Commercial Law
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IN BRIEF

Small businesses are consumers in their own right. So why shouldn't they be protected from unfair contracts in the same way that consumers are? Now, new legislation ensures that David won't face Goliath without a shield.

Our modern consumer protection laws ensure that consumers are protected from unfair contract terms. Those laws arose from a Productivity Commission report in 2008. At that time, the Productivity Commission also recognised that small businesses face many of the same issues as consumers – for instance, unequal bargaining power and lack of resources for negotiating. It recommended that unfair contract protections should apply similarly to consumers and small businesses.

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