Small business contracts

Contracts with small business, entered into or renewed after 12 November 2016, have extra requirement by law.  These include contracts such as:

  • the contract covers the supply of goods or services, or the sale or grant of an interest in land
  • at least one party is a small business, employing less than 20 staff (including casual employees)
  • the upfront price payable is no more than $300,000 for a 12 month contract, or $1 million for contracts longer than 12 months.

If an existing contract is varied or changed after 12 November 2016, the law only applies to the changed terms.

Common standard form contracts for small businesses

A standard-form contact is a contract offered to consumers purchasing a certain good or service that is the same or similar for all consumers.  Standard form contracts for small businesses include:

  • services provided (such as information technology, advertising, document handling, security or transport)
  • mobile phone contracts
  • utilities such as power, gas or water.

Contracts and terms which are not covered for small businesses

  • contracts entered into prior to 12 November 2016, unless renewed on or after
  • shipping contracts
  • constitutions of companies, managed investment schemes or other kinds of bodies
  • certain insurance contracts, including car insurance.

There are terms excluded from the unfair contract term including:

  • terms that define the main subject matter of the contract
  • terms that set the upfront price payable
  • terms that are required or expressly permitted by a law of the Commonwealth, state or territory.

Related information