Do you use standard contracts/agreements in your practice? Are they legally binding? New ACCC Law 2016

Darth Vader Documentation

Do you use standard contracts/agreements in your practice? Are they legally binding? New ACCC Law 2016

This new “standard form” law is designed to protect smaller parties such as contractors, employees and suppliers from unfair contract terms and conditions. If there is a breach, this term or agreement may not be legally enforceable.

“A standard form contract is one that has been prepared by one party to the contract and where the other party has little or no opportunity to negotiate the terms – that is, it is offered on a ‘take it or leave it’ basis”. This may affect your employment contracts or contracts with doctors and allied health. We have a solution.

“A standard form contract is one that has been prepared by one party to the contract and where the other party has little or no opportunity to negotiate the terms – that is, it is offered on a ‘take it or leave it’ basis”.

5-6 years old boy and plate of cooked vegetables isolated on white

Take it or leave it no longer works!

“The law will apply to a standard form contract entered into or renewed on or after 12 November 2016, where:

• it is for the supply of goods or services or the sale or grant of an interest in land
• at least one of the parties is a small business (employs less than 20 people, including casual employees employed on a regular and systematic basis)
• the upfront price payable under the contract is no more than $300 000 or $1 million if the contract is for more than 12 months.

If a contract is varied on or after 12 November 2016, the law will apply to the varied terms.

Effect of having an unfair contract term

If a court or tribunal finds that a term is ‘unfair’, the term will be void – this means it is not binding on the parties. The rest of the contract will continue to bind the parties to the extent it is capable of operating without the unfair term.”

Source: https://www.accc.gov.au/business/business-rights-protections/unfair-contract-terms

This new law will come into affect after 12th November 2016 and will affect all key contracts you have in your practice. For example – any service agreements with practitioners, supplier agreements or employment/contractor contracts you may have with your staff, including property leases.

We wish to advise our current suite of template contracts, which you can purchase from us meet the requirements of this new law and so will be unaffected. Any Health & Life template contract purchased prior to November 2015 need to be reviewed by your adviser. Please contact us for further information.

Clearly, the method of implementation of the agreement in your practice will make a difference as the implications of this new ruling goes beyond the words of the contract.

Please consult your adviser or us for further information. Note we are not lawyers. We do sell healthcare industry specific template contracts for employees, providers and leases.

Please seek independent legal advice before acting on any advice or templates.

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