Reforms to unfair contract terms regime—Corporations Committee submission
The submission to the Treasury in response to the Treasury Laws Amendment (More Competition, Better Prices) Act 2022 (Cth) (UCT Reforms) that is due to come into effect on 9 November 2023, was prepared by the Corporations Committee of the Business Law Section of the Law Council of Australia (the Committee).
The key matters the Committee wishes to bring to Treasury’s attention are as follows:
- A consequence of the UCT Reforms, in particular the expanded definition of “small business contract” as inserted in the Australian Securities and Investments Act 2001 (Cth) (ASIC Act), is that certain institutional financial market contracts between sophisticated financial market participants will be inadvertently caught by the regime.
- Not only is this inconsistent with the policy objectives of the UCT Reforms, which focus on the protection of consumers and small businesses with limited resources and bargaining power, but it will also have an unintended and detrimental effect on how Australian institutional financial market transactions are conducted.
The Committee expresses its concerns with this (presumably) unintended effect, and requests a suitable and prompt solution to this issue.