I run a small cafe and signed a standard supplier agreement for equipment leasing. Later I noticed the supplier can change the price whenever it wants and can end the contract at any time, but I am locked in for years with hefty exit fees. Do small businesses have any protection against terms like this?
Yes, to a limited extent. Since the Fair Trading Act 1986 was amended, the unfair contract terms rules extend to small trade contracts as well as consumer contracts. A small trade contract is a standard form contract where each party is in trade and the annual value is at or below a set threshold, currently around 250,000 dollars. A term is unfair if it causes a significant imbalance, is not reasonably necessary to protect the supplier's legitimate interests and would cause you detriment. Terms allowing one party to vary the price or exit at will while the other is locked in are typical examples. Only a court can declare a term unfair, and the Commerce Commission generally brings the case, so gather the contract and evidence of the impact and lodge a complaint. Get legal advice before withholding payments.
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