JJ Richards contract terms declared unfair and void
Protection for small business is reviewed
BULK WASTE giants JJ Richards & Sons have had a number of contract terms used to engage small businesses voided by the federal court.
The Federal Court this month declared, by consent, that eight terms in contract used by the company to engage small operators are unfair, and therefore void following action by the ACCC.
This investigation is part of a wider ACCC review of small business contracts in a range of industries.
JJ Richards is one of the largest privately-owned waste management companies in Australia and provides recycling, sanitary and green waste collection services.
“This is the first court action by the ACCC to enforce new laws that protect small businesses from unfair contract terms,” ACCC Deputy Chair Dr Michael Schaper said.
“Under Australian Consumer Law, terms that create a significant power imbalance between parties, are not necessary to protect legitimate interests, and which would cause significant financial detriment to a small business if relied on, are unfair and void.”
“The Court’s decision serves as a reminder to large businesses to review their standard form contracts and make sure they don’t include any unfair terms.
“The ACCC will not hesitate to take appropriate action to ensure large businesses are complying with the unfair contract terms provisions,” Dr Schaper said.
The contract terms deemed unfair by the court were found to bind customers to subsequent contracts unless they cancel the contract within 30 days before the end of the term.
Allowed JJ Richards to unilaterally increase its prices and removed any liability for JJ Richards where its performance is “prevented or hindered in any way”.
The disputed terms also allowed JJ Richards to charge customers for services that did not take place, even when beyond the customer’s control, granted exclusive rights to remove waste from the premises and allowed the company to suspend its service but continue to charge the customer if payment is not made after seven days.
The contract terms also stipulated unlimited indemnity in favour of JJ Richards, prevented customers from terminating their contracts if they have payments outstanding.
His Honour also found that “the Impugned Terms tend to exacerbate each other, increasing the overall imbalance between the parties and the risk of detriment to JJR Customers.”
JJ Richards consented to orders restraining it from relying on the unfair terms in existing small business contracts and from using the terms in future contracts with small businesses.
WASTE COLLECTION: JJ Richards & Sons, one of Australia’s largest privately-owned waste management companies has attracted ACCC attention.