Contract-Corporate-1900-x-500

ACCC continues to press big business to cut unfair contract terms

Suzanne Rieschieck, Kate Davey

Stevedore companies DP World Australia, Hutchison Ports Australia and Victorian International Container Terminal (VICT) have agreed to remove or amend terms in their standard form contracts that the ACCC considered were likely to be “unfair” within the meaning of the Australian Consumer Law.

DP World and Hutchison had contracts with land transport businesses which included terms that:

  • allowed a stevedore to unilaterally vary terms in the agreements without notice, including the fees paid by the transport businesses.
  • limited their liability for loss and damage suffered by the transport businesses, but did not limit the liability of the transport businesses in the same way.

DP World’s contract also required transport businesses to pay the stevedore’s legal costs and expenses, in circumstances where any such payment would usually be determined by court order.

VICT’s contract required transport businesses to indemnify VICT for loss or damage, with no reciprocal obligation on VICT.

The Australian Consumer Law Unfair Contract terms provisions apply to protect businesses with less than 20 employees where the upfront price payable under a standard form contract is less than $300,000 or the contract has a duration of more than 12 months and an upfront price payable that is less than $1,000,000. Russell Kennedy has previously published alerts about these provisions, which have applied to contracts with small business since 12 November 2016. 

More law reform to further strengthen protections to small businesses from unfair contract terms has recently been foreshadowed by the Federal Government.

The ACCC has reported that the three stevedores cooperated with its investigation and agreed to remove or amend the terms. The contract terms which allowed unilateral amendment without notice have either been removed, or now require the stevedore to give 30 days’ notice of any change.

Hutchison has provided a court enforceable undertaking that it will:

  • ensure future agreements, for a minimum period of three years, do not include the unilateral variation or liability clauses described above;
  • not enforce or rely on those clauses, or terms of similar effect, for customers that entered into its Terminal Carrier Access Agreement dated 1 January 2016;
  • publish a corrective notice on its customer portal and website;
  • develop, implement and maintain an ACL compliance program.

The ACCC’s investigation follows on from Court proceedings it issued against big business such as JJ Richards and Sons and Servcorp not long after the 2016 changes took effect. It demonstrates the ACCC’s continuing focus on enforcing the 2016 provisions.

Businesses should contact Suzanne Rieschieck or Kate Davey from Russell Kennedy Lawyers to seek advice about whether their standard terms may be contrary to the Australian Consumer Law.  Suzanne Rieschieck is a Principal and Kate Davey is a Senior Associate in our Dispute Resolution team. Both Suzanne and Kate have experience acting for traders, small businesses and consumers in VCAT and the Courts regarding Australian Consumer Law disputes.

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