From the Shopping Centre Council of Australia
Under the guise of introducing a national consumer protection law, and ignoring its own Principles of Good Regulatory Practice, the Federal Government has announced that proposals to regulate unfair contract terms will apply not only to business-to-consumer transactions but also to all business-to-business contracts.
No Australian State or Territory, and very few western countries, have ever taken such a radical step.
It is a long accepted convention that governments and courts should not restrict commercial enterprise and the freedom of contract, nor interfere with the sanctity of contracts, unless a compelling case for intervention has been established and unless there is a clear net benefit to the community.
No such case has been made or even attempted.
Despite claims that the draft legislation will only apply to standard form contracts, the legislation does not define such contracts; carries a presumption that all contracts are standard form contracts, unless proven otherwise; and places the onus of rebutting the presumption on the supplier, not the party challenging the contract.
This means the terms of any contract, including any lease for commercial, retail and industrial property, could subsequently be subject to legal challenge even when those leases are the result of extensive negotiations and have been freely entered into by both parties.
It is also not correct, as has been claimed, that the Productivity Commission, in its report on its Review of Australia’s Consumer Policy, recommended that these provisions be applied to business-to-business contracts.
Not one of the Productivity Commission’s recommendations supports, or even infers, that they would apply to business-to-business transactions.
Indeed the Productivity Commission, in another report released around the same time, argued against applying the notion of ‘unfairness’ to business-to-business transactions, specifically in the area of retail tenancy leases.
The Shopping Centre Council of Australia has lodged a submission calling on the Federal Government to redraft the proposed legislation to exclude business-to-business transactions.
