The new unfair contract terms taking effect from 12 November 2016 will apply to standard form contracts.
A contract will be taken to be a standard form contract unless the other party can establish to the contrary.
In determining if a contract is a standard form contract, the court must take into account:
1. Whether one (1) party has most of the bargaining power;
2. Was the contract prepared by one (1) party before any discussions were entered into by the parties;
3. Was one (1) party required to either accept or reject the contract in the form in which it was presented;
4. Was the other party given an opportunity to negotiate the terms of the contract; and
5. Did the terms of the contract take into account specific characteristics of another party or the particular transaction.
Generally speaking a franchise agreement would fall within the definition of a standard form contract.
Franchisors should review their contracts leading up to the introduction of the new laws.
This article is for information purposes only and should not be relied upon as legal advice. You must obtain your own legal advice with respect to your specific set of circumstances. You can contact The Franchise & Business Lawyers directly to obtain advice particular to your needs.
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