ACCC launches 1st small business unfair contracts court action

Who is John Galt?

Well-Known Member
September 7 2017 - 2:38PM
ACCC launches first small business unfair contracts court action
Cara Waters

The competition watchdog has instituted unprecedented proceedings in the Federal Court against JJ Richards & Sons for alleged unfair terms in its small business contracts.

The action by the Australian Competition and Consumer Commission against the waste management firm is the first court proceeding brought under the protections for small businesses against unfair contracts in the Australian Consumer Law.

Michael Schaper, deputy chairman of the ACCC, estimates several thousand small businesses have contracts with JJ Richards. Photo: Michel O'Sullivan

JJ Richards is one of the biggest players in the waste management industry and provides recycling, sanitary and green waste collection services.

The watchdog alleges eight clauses in JJ Richards' standard form small business contract are void because they create a significant imbalance in the rights and obligations of JJ Richards and small businesses, are not reasonably necessary to protect JJ Richards' legitimate interests and would, if relied on, cause significant financial detriment to small businesses.

The ACCC alleges JJ Richards' standard form small business contracts contain eight unfair contract terms, including only giving small businesses 30 days at the end of a five-year contract to cancel the contract, allowing JJ Richards to unilaterally increase prices and granting JJ Richards exclusive rights to remove waste from a businesses' premises.

The ACCC identified the waste management industry as a key area of concern earlier this year and when the watchdog requested a copy of JJ Richards' standard form contract it was given copies of 10,000 contracts.

ACCC deputy chair Michael Schaper estimates "several thousand" small businesses have contracts with JJ Richards.

He says the court action is aimed at providing some relief for small businesses clients of JJ Richards.

"For the first time, it starts to develop some case law for what is an unfair contract," he says. "That is really important. We hope it will get to the point when small business will say 'We all know what you can and can't put in the contracts'."

Mr Shaper said if small businesses identified a term that was unfair in a contract, they should negotiate with the larger firm. If that failed, small businesses were "well within their rights" to come to the ACCC.

"This is a priority for us, it's a new law and it's potentially a game changer for small business," he said.

The unfair contract terms provisions of the ACL were extended to cover standard form contracts involving small businesses in November last year.

This is a priority for us, it's a new law and it's potentially a
game changer for small business.

- Michael Schaper

Earlier this year, the ACCC issued a court-enforceable undertaking to Sensis in its first action under the legislation but the proceedings against JJ Richards are the first court action by the regulator.

MySmallBusiness contacted JJ Richards for comment but the business is yet to respond.


WiJG? comment:
I am almost embarrassed to copy and paste something from FauxFact's SMH, but stumbled on this whilst surfing. I haven't looked into this case as yet, but it would appear that, as forecast back in February there may be light at the end of the tunnel with Über being brought to heel, via the ACCC's unconscionable conduct rulings in contracts.

Exciting times. :smiles:

Who is John Galt?

Well-Known Member
The ACCC has a habit of almost exclusively prosecuting Australian owned firms.

is an American-Japanese international chain of convenience stores, headquartered in Irving, Texas, that operates, franchises, and licenses some 56,600 stores in 18 countries.

There are many international corporates which operate through an Australian subsidiary.
But there are several cases against international corporates of which this is one.

There are many others, but I think with each case win, the ACCC becomes emboldened and success breeds not only success, but greater funding for (potentially) greater success.