Fertiliser suppliers amend unfair contract terms after ACCC investigation

Suppliers in the fertiliser industry have agreed to amend their contracts following an ACCC investigation into unfair contract terms.

The ACCC obtained copies of standard-form fertiliser supply agreements and identified potentially unfair contract terms in those agreements.

Some of the potentially unfair terms identified by the ACCC included terms giving the supplier the right to unilaterally vary the quantity to be delivered to the buyer or to terminate the agreement if the supplier believed it would not be able to supply the goods. Some terms restricted buyers’ rights to raise issues about defects with the goods.

Under the new unfair contract term laws that come into effect on 10 November 2023, the ACCC will be able to take court action to seek pecuniary penalties for breaches of the unfair contract term law. The maximum penalty will be the greater of $50 million or three times the value of the benefit derived or, if that value cannot be determined, 30 per cent of the company’s turnover during the period it engaged in the conduct.

“This is an important reminder to all businesses in the agricultural sector of the need to review their standard form small business contracts and remove unfair contract terms now, or they risk significant penalties when the new laws take effect.” ACCC Deputy Chair Mick Keogh said.

The new unfair contract terms provisions will also expand the definition of a ‘small business’ to include businesses with up to 100 employees or up to $10 million in annual turnover.