Some time this month, Minister for Competition Policy and Consumer Affairs Chris Bowen will introduce an ‘unfair contract terms’ Bill into Federal Parliament. Telstra and Optus have both slammed it.
Businesses that contract with Telstra and Optus need to understand why the coming law could give the telco giants such grief.
The beefs
Optus says:
- It is ‘highly concerned’.
- The planned law ‘suggests a lack of understanding of the nature of business-to-business transactions, which would impose enormous additional (and entirely unjustifiable) compliance costs on companies such as Optus, and would fundamentally undermine the effectiveness and efficiency of how business-to-business transactions are conducted.’
And Telstra reckons:
- ‘Significant uncertainty, unnecessary disruption and immense costs will result for small and large businesses alike.’
The planned law
The proposed law certainly will shake up contracts in Australia, as we explained back in February.
It will apply to ‘standard form contracts’ of the ‘not negotiable – take it or leave it’ variety. Seriously unbalanced terms in such contracts will be void unless they are reasonably necessary to protect a party’s legitimate interests.
But it isn’t just a ‘consumer’ law
Here’s a serious problem for mega-wholesalers like Telstra and Optus. The law will apply to B2B contracts as well as B2C.
In other words, a standard Telstra wholesale agreement could fall within the protection of the law if it wasn’t genuinely negotiable.
‘Draft – for discussion purposes only’
We’ve all seen those massive Telstra contracts with ”Draft – for discussion purposes only’ in the header of every page. And a lot of us have realised that it’s Telstra-speak for ‘Not negotiable – don’t even ask.’
Under the new ‘consumer’ law, these and other B2B contracts, and the processes around them, will come under pressure. Sham negotiations may not be sufficient to carve them out of the ‘standard form contract’ regimes.
No wonder the major B2B suppliers are concerned.
Loading ...
No comments yet.