Unfair Contract Terms and Transport Operators

The stuff you need to know about new unfair contract laws.

Did you know laws have recently changed in Australia regarding contract laws?

We asked our legal expert, Gillian Bristow, everything you should know about unfair contract laws if you are involved in the transport. Check out the video and the main takeaways below.

What’s changed?

Since the November of 2016, courts have had the power to interfere when a small business standard form contract contains terms that are deemed ‘unfair’.

What is a standard form contract?

There are several indicators of a Standard Form Contract.

• One party had no opportunity to negotiate the contract
• The contract was given on a ‘take it or leave it’ basis
• The contract was prepared before the parties had started to negotiate the terms of the deal

What is a small business contract?

A small business contract either (1) relates to an amount of money that is under 300K, or (2) the upfront price of the contract is under 300k or, if the contract last for a year or more, up to 1 million dollars.

When can a court find that a term is unfair? 

A court will find a term to be unfair if it meets these any of these criteria.

• If the term goes too far. As in, it does more than is reasonably necessary to protect someone’s legitimate interests.
• If the term is too hard to understand. It may be too convoluted or too vague for a reasonable person to make sense of it.
• If the term is hidden away. A court is more likely to consider a term to be unfair if it is in an unreasonably small font on the back of a page that is unrelated in context, than if it’s clear and obvious in the document.

Why are these changes important to transport operators?

Knowledge of these changes are important because transport contracts would often contain hidden terms and conditions of carriage. This means parties would attempt to exlcude their liability and evade a potential legal dispute.