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The ACCC has taken action against Fuji (Fuji Xerox Australia Pty Ltd and a related company) for allegedly including unfair contract terms in its contracts with small businesses. Fuji supplies a range of business products on a lease basis, including photocopiers, scanners and multifunction printers. Fuji also services these products, and supplies software and print management services. The Australian Consumer Law contains protections for small businesses from unfair terms in business-to-business standard form contracts. In this update we explain how to spot unfair terms, what you can do if you find one and why we’ve taken action against Fuji. Understanding unfair contract terms To be unfair the term must: cause a significant imbalance in the parties’ rights and obligations not be reasonably necessary to protect the legitimate interests of the party advantaged by the term cause financial or other detriment to a small business if it were relied on. 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. Only a court (not the ACCC) can decide whether a term is unfair. The ACCC website has examples of unfair terms and information on what type of contracts are covered. What to do if you think a term in your contract is unfair If you think a term in your contract is unfair, you can: ask the other party to remove the term or amend it so it is no longer unfair talk to a lawyer about your options contact your local state Small Business Commissioner or the Australian Small Business and Family Enterprise Ombudsman make a report to the ACCC. Why we’ve taken action against Fuji The ACCC instituted proceedings against Fuji alleging that nine types of Fuji’s standard form small business contracts contain numerous unfair contract terms, including automatic renewal terms, excessive exit fees and unilateral price increases. ACCC Deputy Chair Mick Keogh, who has particular responsibility for small business, explained why we took action. “We have received a number of complaints from small businesses alleging that some of the terms in Fuji’s contracts have caused them significant financial harm,” Mr Keogh said. “Some of the unilateral variation terms allow Fuji to modify contracts by creating new rights and obligations, including increasing prices, without notifying its customers and without giving them any corresponding right to negotiate or reject.” “The ACCC will argue that the unfair terms in these contracts cause a significant imbalance in the rights and obligations of Fuji and the small businesses they contract with,” Mr Keogh said. “This court action by the ACCC should prompt all other traders in the printing support industry to review their standard form contracts and make any necessary changes to remove unfair contract terms.” The ACCC is seeking declarations that the terms in the existing contracts between Fuji and its small business customers are unfair and therefore void, and an injunction to prevent Fuji from relying on these terms in its current contracts or entering into future contracts that contain those terms. The ACCC is also seeking an order for a corrective notice, a compliance program and costs. Find out more in our media release. Kind regards, Small Business team
Australian Competition and Consumer Commission (ACCC)
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