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The IPA has backed the Australian Small Business and Family Enterprise Ombudsman’s warning to the big four banks to comply with their obligations under the unfair contracts legislation.
Contract terms that may be found to be unfair include terms that allow one party to change the fees being paid or change terms and conditions without telling the other party; terms that allow one party to terminate the contract but not the other party; or terms that penalise one party for breaching or terminating the agreement but not the other party.
Contracts can relate to the supply or hire of goods, services or financial products.
“While the IPA was pleased with the passing of unfair contract legislation which has been in place since November last year, much work is required to enforce current practices which still see unfair clauses in contracts with small business,” IPA chief executive officer, Andrew Conway said.
“We are urging our members to speak to their small business clients and businesses to review all contracts, including those with banks and other lending institutions.
“Quite often in these scenarios, one party has greater bargaining power than the other, and it is a case of ‘take it or leave it’, whether you are dealing with a bank or your local gym.”