Industry welcomes extension of 'unfair' contract term protections

20 March, 2015

The extension of unfair contract term protections to small business will provide hospitality operators with greater confidence when dealing with suppliers and distributors, according to peak industry association Restaurant & Catering Australia (R&CA).

The new small business protections announced by the Prime Minister and Minister for Small Business Bruce Billson will allow the courts to declare a term void within a contract if it is deemed unfair.

R&CA CEO John Hart says the changes will make a significant difference to the tourism and hospitality sector.

"The tourism and hospitality sector is dominated by small business operators, many of whom are time-poor and focused on the day-to-day operation of their business. Reviewing and understanding lengthy contracts from suppliers can be an overwhelming and daunting task.

"The extension of unfair contract protections to small business provides operators with confidence and certainty that they have a course of redress should contract terms prove misleading or unfair.

"Preliminary results from R&CA's 2015 Industry Benchmarking Survey revealed significant increases in the cost of goods and occupancy costs. Businesses indicated reducing the cost of produce, electricity and gas was the single most important factor in improving their business performance.

"At a time when operator margins are thin, ensuring businesses are not unduly burdened with hidden costs, terms and conditions is extremely important in ensuring these small businesses remain viable," Hart says.