The Australian Competition and Consumer Commission (ACCC) has taken court action for the second time in as many weeks to provide protection for small business from unfair contract terms.

Yesterday the ACCC instituted proceedings against Servcorp Ltd and two of its subsidiaries, alleging a number of unfair clauses in its standard form contracts with small businesses. Servcorp is a multinational provider of serviced office space and virtual office services.

These clauses allowed Servcorp to, amongst other things:
– automatically renew a contract, and increase the price, without prior notice to the customer
– unilaterally terminate a contract and impose penalty-type consequences on the customer
– unreasonably limit Servcorp’s liability or impose unreasonable liability on the customer
– unilaterally determine whether the contract had been breached
– acquire the customer’s property without any notice.

The ACCC considers these clauses contrary to the unfair contract term provisions of the Australian Consumer Law, and  allege they are not reasonably necessary to protect Servcorp’s legitimate interests.

The ACCC is seeking declarations that these clauses are unfair and void, as well as injunctions, publication orders, compliance program orders and costs.

Check out the ACCC’s media release if you’d like to know more.

If you think your small business may be dealing with an unfair contract term, see refer to the ACCC website for information on your rights.

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