General informationNot legal advice. The ACCC’s guidance on standard form contracts and unfair terms and your state or territory’s consumer protection agency are the places to check; for your own agreement, a lawyer can tell you where you stand.
Is it a standard form contract?
business.gov.au describes standard form contracts as pre-written contracts a business offers on a “take it or leave it” basis, and gives internet, phone and utilities as examples of services a business may have to accept them for. Consumer Affairs Victoria defines one as prepared by one party, where the other has little or no opportunity to negotiate the terms.
The ACCC says a contract is presumed to be a standard form contract, so the party that prepared it must prove it isn’t. In deciding, a court will consider whether one of the parties:
- “has all or most of the bargaining power in the transaction”
- drew up the contract without talking the transaction through with the other party, or before doing so
- could effectively only accept or reject the terms as presented
- was given any real opportunity to negotiate the terms
- and whether the terms took account of anything particular to the other party or the transaction.
A court may also weigh anything else it considers relevant, and since 9 November 2023 it also considers whether the party that prepared the contract has made other contracts that are the same or very similar, and how many times. A contract can still be a standard form contract even if you could negotiate minor changes or pick from options the other party set.
So no single question settles it, but one worth asking before you sign a storage agreement is whether you had any real chance to negotiate. Consumer Affairs Victoria’s advice before entering any contract is to read it carefully, ask for conditions to be added, changed or removed, and get advice from a legal practitioner if you don’t understand it.
Is your business covered?
The test for a small business contract is in section 23(4) of the Australian Consumer Law, which is Schedule 2 to the Competition and Consumer Act 2010. In both versions the contract has to be for supplying goods or services, or for selling or granting an interest in land. The test changed on 9 November 2023. The ACCC says the new rules apply to standard form contracts made or renewed on or after that date, and to a term that is varied or added on or after it.
Made or renewed before 9 November 2023
The Act, as it stood until then, covered a contract where both of these applied:
- at least one party was a business that, at the time the contract was entered into, “employs fewer than 20 persons”
- the upfront price payable did not exceed $300,000, or $1,000,000 if the contract ran for more than 12 months.
The ACCC’s page puts the first condition as “20 or fewer employees”. The Act’s own words are “fewer than 20 persons”.
Made or renewed on or after 9 November 2023, or a term varied or added on or after it
At least one party “satisfies either or both” of these, in the Act’s words:
- it makes the contract while carrying on a business and “employs fewer than 100 persons”
- its turnover for its last income year was “less than $10,000,000”.
The ACCC puts it as “fewer than 100 employees, or” less than $10 million in annual turnover.
Casual employees count only if employed on a regular and systematic basis, under both versions of the Act. Since 9 November 2023, a part-time employee also counts as the matching fraction of a full-time employee. For how to count, the ACCC’s guidance on small business contracts has more detail.
What makes a term unfair
The ACCC says contract terms are unfair if they:
- “cause a significant imbalance in the rights and obligations of the parties under the contract”
- “are not reasonably necessary to protect the legitimate interests of the party who gets an advantage from the term, and”
- “would cause financial or other harm to the other party if enforced.”
A court weighing a term “must consider the contract as a whole and whether the term is transparent”, meaning in reasonably plain language, clear and not hidden. It also looks at whether other terms offset the potential unfairness.
business.gov.au also says the law doesn’t apply to terms that set the upfront price payable under the contract, define its main subject matter, are needed or expressly permitted by law, or were negotiated by both parties.
Questions to read the agreement against
Government guidance gives examples of the kinds of term that may be unfair. Each makes a question worth asking of a storage agreement:
- Can only the operator change the price or the terms?
business.gov.au’s examples include a term letting only one party vary the contract, such as the price.
- Can only the operator decide whether it renews?
Another of business.gov.au’s examples: only one party can decide whether to renew the contract, or not.
- Who decides that the agreement has been breached?
A term letting only one party decide whether the other has breached the contract is on both business.gov.au’s and Consumer Affairs Victoria’s lists.
- Does it limit your right to sue, or the operator’s liability for negligence?
Consumer Affairs Victoria lists terms that limit a party’s rights to sue another party, and terms that avoid or limit liability for negligence.
- Is there a penalty for ending early, and does it run both ways?
Its list also includes terms that penalise only one party for breaching or ending the contract.
A term that matches one of these is not automatically unfair: business.gov.au says only a court can find a term unfair, and that an unfair term is void. If the contract can continue without it, the rest stays legally binding.
If a term looks unfair
business.gov.au lists what you can do:
- ask the other party to take the term out or change it
- ask the ACCC what your options are
- contact ASIC where the contract covers a financial product or service
- get advice from a lawyer
- contact your state or territory’s consumer protection agency.
It also explains who does what: the ACCC deals with widespread issues but not individual complaints, while state and territory consumer protection agencies manage individual complaints and may offer voluntary dispute services.
Goods left behind: how Victoria handles it
Victoria has rules for “uncollected goods”, and Consumer Affairs Victoria writes them for one situation: goods a consumer left with a business for a time and has not collected, has not given instructions about, cannot be contacted about, or has not paid the business’s costs of keeping, the “relevant charge”, within a reasonable time. Its pages don’t say how far the rules reach a business’s own storage agreement, so read what follows as how Victoria treats a consumer’s goods, and check with Consumer Affairs Victoria before relying on it for a business.
- A business must notify the owner if it intends to dispose of uncollected goods, and hold them for a set time first, which depends on the kind of goods. The time limits for low, medium and high-value goods and perishables are on Consumer Affairs Victoria’s disposal pages.
- The owner can stop a disposal by paying the relevant charge and collecting the goods, arranging delivery, or applying to a court or the Victorian Civil and Administrative Tribunal (VCAT) to settle the dispute.
- A business must not dispose of goods when the owner disputes the relevant charge and an application has been made to a court or VCAT to determine it.
- Money left over after a sale, once the relevant charge and disposal costs are paid, is “unclaimed money”, handled under the Unclaimed Money Act 2008.
Why the clause mattersConsumer Affairs Victoria says: “If a business has an agreement with the person who left the goods about what would happen if their goods were uncollected, the business does not have to follow the procedures for dealing with uncollected goods set by the Australian Consumer Law and Fair Trading Act 2012.” The agreement’s own default and disposal terms may be what governs, which is a reason to read them, and to ask about them, before you sign.
These are Victoria’s rules. For other states, ask your state’s consumer protection agency.