The Small Business and Trade Council of Australia (SBTC) has lodged a detailed submission to the Australian Treasury calling for a comprehensive review and strengthening of unfair contract terms (UCT) protections for small businesses. The submission follows widespread member feedback that existing laws still leave many sole traders and small operators exposed when dealing with larger commercial partners.
The Problem
Standard-form contracts — particularly in commercial leasing, telecommunications, logistics and supply chain agreements — frequently contain provisions that small businesses have no meaningful ability to negotiate. Despite the 2022 UCT reforms extending to small businesses, SBTC members have reported ongoing challenges in enforcing their rights and understanding which provisions qualify as “unfair”.
According to data from the Australian Competition and Consumer Commission (ACCC), complaints from small businesses about unfair contract terms have remained consistently high, with retail and franchising sectors among the most frequently cited industries.
Key Recommendations
- Expand the definition of “small business” in the UCT framework to better reflect the diversity of the sector
- Introduce a model contract term library that businesses can use as a reference baseline
- Require government agencies to proactively publish guidance on common unfair terms in specific industries
- Fund the ACCC to conduct annual compliance audits in high-risk sectors
SBTC President noted that while the 2022 amendments were a significant step forward, implementation support for small businesses has been limited. “Most of our members do not have in-house legal counsel. They need practical, plain-English guidance on what they are and are not required to accept in a contract.”
For more information on the UCT framework and your rights, visit the Fair Work Ombudsman or contact the SBTC policy team.
