Last week the Australian government has made the second out of a series of moves aimed at protecting small businesses.
The first one was the competition law changes that are about to take place.
But this one is much more significant because it is put into action right away.
What does it mean?
Business to business contract law is different than consumer to business contract law. Or at least it was so until now.
Consumers are protected by the law in a way that makes contract terms void even if they have been signed by both parties if the clauses are contracting the consumer protection law.
For example, if in consumer law a warranty for a certain product is supposed to be 12 months, a contract stating that it will only be 6 months is invalid.
Now, the same protection is extended to small businesses. This mens that even if small businesses sign unfavorable contracts they are protected by the new regulations.
What should businesses do?
Most businesses will need to review all business-to-business contracts they have signed and make sure the clauses in them are not void. The best way to make sure your contracts are up to date with the new regulations is to contacts your lawyer so that she can propose any terms that need to be changed.
The new law will be in effect from 2016 on so you have enough time to review your contracts.
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