24th October, 2018 · Media Release

Unfair Contract Terms Need to Apply to
New Car Dealers

The peak body representing franchised new car Dealers has welcomed the Australian Government’s announcement that it will review the effectiveness of protections for small business against unfair contract terms (UCTs).

“The Government is 100 percent right to review UCTs and we congratulate Assistant Treasurer, Stuart Robert, for prioritising this important piece of work,” said AADA CEO David Blackhall.

“The AADA will be seeking changes to the criteria which small business need to meet as we believe these protections should be extended to franchised new car Dealers as a matter of urgency,” he said.

“ACCC Chair, Rod Sims, made a speech recently in which he rightly said that these thresholds can exclude businesses that may require protection from UCTs. He cited new car dealers as falling outside the existing thresholds due to the high value of the products sold and number of employees,” said Mr Blackhall.

“New car Dealers are locked in agreements with vehicle manufacturers which have UCTs, such as unilateral variation clauses. However, due to the current small business thresholds, most of our members do not enjoy protections against these terms,” said Mr Blackhall.

“We look forward to working with the Treasury in its review over the next few months,” he said.

The AADA advocates for the establishment of an Automotive Industry Code of Conduct to regulate behaviour between new car Dealers and offshore vehicle manufacturers. Such a code should include protections against unfair contract terms as well as other industry-specific behaviours.

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