Do you use standard contracts/agreements in your practice? Are they legally binding? New ACCC Law 2016

This new “standard form” law is designed to protect smaller parties such as contractors, employees and suppliers from unfair contract terms and conditions. If there is a breach, this term or agreement may not be legally enforceable.

“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”. This may affect your employment contracts or contracts with doctors and allied health. We have a solution.

“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”.

5-6 years old boy and plate of cooked vegetables isolated on white

Take it or leave it no longer works!

“The law will apply to a standard form contract entered into or renewed on or after 12 November 2016, where:

• it is for the supply of goods or services or the sale or grant of an interest in land
• at least one of the parties is a small business (employs less than 20 people, including casual employees employed on a regular and systematic basis)
• the upfront price payable under the contract is no more than $300 000 or $1 million if the contract is for more than 12 months.

If a contract is varied on or after 12 November 2016, the law will apply to the varied terms.

Effect of having an unfair contract term

If a court or tribunal finds that a term is ‘unfair’, the term will be void – this means it is not binding on the parties. The rest of the contract will continue to bind the parties to the extent it is capable of operating without the unfair term.”

Source: https://www.accc.gov.au/business/business-rights-protections/unfair-contract-terms

This new law will come into affect after 12th November 2016 and will affect all key contracts you have in your practice. For example – any service agreements with practitioners, supplier agreements or employment/contractor contracts you may have with your staff, including property leases.

We wish to advise our current suite of template contracts, which you can purchase from us meet the requirements of this new law and so will be unaffected. Any Health & Life template contract purchased prior to November 2015 need to be reviewed by your adviser. Please contact us for further information.

Clearly, the method of implementation of the agreement in your practice will make a difference as the implications of this new ruling goes beyond the words of the contract.

Please consult your adviser or us for further information. Note we are not lawyers. We do sell healthcare industry specific template contracts for employees, providers and leases.

Please seek independent legal advice before acting on any advice or templates.

For more insights visit our blog.

About me: David Dahm BA (Acc.), CA., FCPA, CTA, FFin, CPM, FAAPM, FAIM, FGLF.

Chartered Accountant, Chartered Tax Adviser, Registered Tax Agent, Former AGPAL Surveyor 10 years of service

David Dahm is CEO and founder of the national medical and healthcare chartered accounting firm Health and Life and global Founder and CEO of the not for profit project the International Healthcare Standards and Ethics Board (www.ihseb.org)

After a serious work related car accident in 1989, and nine operations later I continue to be a patient and provider advocate. I enter my third decade as a national Chartered Accountant for Medical and Healthcare practices in Australia. I am a former 10-year Australian General Practice Accreditation surveyor. I come from a medico family. I have served on the AAPM national Board and was the inaugural national Chair of the Certified Practice Manager CPM post nominal. I continue to provide accounting tax and practice management advice to many practices all over Australia.

You know who you are and I thank you for this real honour and privilege to serve you and your community through you. Note, I am not a lawyer please seek appropriate legal and accounting advice. This information is for general information and discussion only.

Recommended Posts

No comment yet, add your voice below!


Add a Comment

Your email address will not be published.