Posted by Elizabeth Gore-Jones
on 3 November 2022
Franchisors Must Review Franchise Agreements and Other Documents
The new unfair contract terms regime passed through parliament last week.
The new regime:
1. Introduces penalties relating to unfair contract terms; and
2. Increases the maximum penalties for breaches of some of the provisions of the Competition and Consumer Act including the Australian Consumer Law.
Penalties for unfair contract terms will come into effect 12 months after the bill receives royal ascent.
The new penalties will take effect the day after royal ascent is granted.
Franchisors should review their agreements as a matter of priority over the next 12 months.
Previously unfair contract terms did not attract penalties. The introduction of these substantial penalties mean that Franchisors should take this new law seriously.
Author:Elizabeth Gore-JonesAbout: Elizabeth specialises in franchising law. She lectures at Bond University PLA in franchising, she sits on the Queensland Law Society Franchising Committee, she is a past member of the Women in Franchising committee and a past member of the Franchise Council of Australia.
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