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The Federal Government has moved on its election commitment to extend unfair contract term protections from consumers to small businesses, releasing a discussion paper with state and territory consumer affairs ministers today.

While the Australian Consumer Law currently protects individual consumers from unfair terms in standard form contracts, it does not currently provide such safeguards for small businesses.

Small businesses, like individual consumers, are often offered pre-prepared contracts on a ‘take it or leave it’ basis and can lack the resources to effectively navigate or negotiate these contracts.

Sometimes these contracts contain unfair terms that increase the cost of doing business and undermine trust, which is vital to business relationships.

Getting the balance right between protecting small businesses against unfair contract terms, while at the same time not imposing unnecessary burden on business, will be an important consideration in this consultation.

Information on the consultation process can be found at www.treasury.gov.au/ConsultationsandReviews/Consultations.

Stakeholders are encouraged to read the consultation paper and businesses of all sizes are also encouraged to complete a short survey.

Brief feedback can be lodged on the website via the feedback form while those with more detailed feedback are encouraged to lodge a formal submission by 1 August 2014.

Following the consultation process, Consumer Affairs Ministers will meet to discuss the feedback from stakeholders and assess the best way forward.