Suppliers in the fertiliser industry have agreed to amend their contracts following an 糖心原创 investigation into unfair contract terms.
鈥淲e initiated an investigation after receiving complaints that fertiliser suppliers were using contracts in a way that could disadvantage farmers,鈥 糖心原创 Deputy Chair Mick Keogh said.
The 糖心原创 obtained copies of standard form fertiliser supply agreements and identified potentially unfair contract terms in those agreements.
A term in a standard form contract may be unfair where it creates a significant imbalance in the parties鈥 rights and obligations under the contract, is not reasonably necessary to protect a party鈥檚 legitimate business interests or is likely to cause financial or other harm to the other party if enforced.
Some of the potentially unfair terms identified by the 糖心原创 included terms giving the supplier the right to unilaterally vary the quantity to be delivered to the buyer or to terminate the agreement if the supplier believed it would not be able to supply the goods. Some terms restricted buyers鈥 rights to raise issues about defects with the goods.
All the fertiliser suppliers that the 糖心原创 engaged with during its investigation co-operated and changed the contract terms to address the 糖心原创鈥檚 concerns.
Under the new unfair contract term laws that come into effect on 10 November 2023, the 糖心原创 will be able to take court action to seek pecuniary penalties for breaches of the unfair contract term law. The maximum penalty will be the greater of $50 million or three times the value of the benefit derived or, if that value cannot be determined, 30 per cent of the company鈥檚 turnover during the period it engaged in the conduct.
鈥淭his is an important reminder to all businesses in the agricultural sector of the need to review their standard form small business contracts and remove unfair contract terms now, or they risk significant penalties when the new laws take effect,鈥 Mr Keogh said.
The new unfair contract terms provisions will also expand the definition of a 鈥榮mall business鈥 to include businesses with up to 100 employees or up to $10 million in annual turnover.
鈥淲e will continue to monitor traders in the fertiliser industry and, more broadly, across the agricultural sector, and we will investigate if we have concerns with contract terms,鈥 Mr Keogh said.
鈥淚f a small business thinks an unfair contract term is being included or enforced in their agreement, we recommend they obtain independent legal advice to understand the options available to them.鈥
Anyone who has competition or fair-trading concerns is encouraged to report an issue affecting their business through our website.