Do you need a Fair Terms Officer?
Introducing the Fair Terms Officer: Your business bestie and the first line of defense
In the business world, we have First Aid Officers and Fire Safety Officers to keep us physically safe. We have Privacy Officers in charge of data... not to mention a C-suite filled with CTOs, CMOs, and COOs – all crucial for keeping things running smoothly.
So here's a fun prediction: get ready to welcome a new addition to the team, the Fair Terms Officer!
With the expanding laws on unfair contract terms in Australia, having someone in charge of ensuring fairness in your contracts and business dealings is becoming necessary.
Let's dive into the exciting world of contract compliance and why the Fair Terms Officer might soon be your new best friend.
The changing landscape
From November in Australia, the scope of unfair contract term laws is set to expand. These laws will apply to more than just new contracts. They will also cover existing contracts you renew or vary after 9 November 2023.
It's usually this moment in my workshops when in-house lawyers start getting a little stressed as they think about their current contract terms and how many low-level contracts with unfair contract terms in them are automated...
This means businesses must be proactive and regularly assess their contract terms for fairness.
Enter the Fair Terms Officer, the superhero of contract compliance! 🦸🏼♀️
Why Do You Need a Fair Terms Officer?
Having a Fair Terms Officer on board ensures that your business stays ahead of the game when it comes to compliance. They keep a vigilant eye on your contracts, ensuring that no unfair terms creep in and put your organisation at risk. With their expertise, they can help you navigate the complex landscape of fair contract terms, ensuring transparency, fairness, and mutual trust in all your business dealings.
Risk mitigation: By proactively assessing and optimising your contract terms, the Fair Terms Officer minimises the risk of penalties and legal disputes.
Enhanced reputation: Demonstrating a commitment to fairness and compliance helps build trust with your clients and partners, enhancing your reputation in the market.
Improved relationships: Fair and transparent contracts foster positive relationships, leading to smoother collaborations and better outcomes for all parties involved.
Gearing up your Fair Terms centre of excellence
Designate a champion: Assign someone within your organisation the role of the Fair Terms Officer, empowering them to take charge of contract compliance and fair dealings.
Stay informed: Keep up to date with the latest changes in unfair contract term laws (especially since the ACCC is likely to launch actions in early 2024), making sure that your contracts align with the new regulations and case law as it develops. https://www.accc.gov.au/
Regular reviews: Get periodic reviews of your contract terms into your legal calendar. Your Fair Terms Officer can lead this initiative each year to identify and fix any potential fairness issues across your suite of contract templates.
Who is the Fair Terms Officer?
The Fair Terms Officer is the dedicated champion of fairness in your organisation. They are the go-to person responsible for reviewing, analysing, and optimising your contract terms to ensure compliance with the ever-evolving laws.
They understand the legitimate business needs of your organisation (or who to go to if we need more information). They understand the contract as a whole. They know the consumer and small business laws that apply. They understand how those laws interact with those that specifically affect your industry. They empathise with the contract users (suppliers, customers, partners, collaborators, affiliates, or independent contractors). They understand the company's strategy now and into the future and are ready to adjust contract terms on the buy side or the sell side to adjust as needed (whilst)
This superhero works tirelessly to protect your business from hefty penalties ($50m per unfair contract term!), and reputational damage, and maintain harmonious relationships with your clients and partners.
Aren't lawyers already the Fair Terms Officers?
Some lawyers perhaps... Traditional lawyers have previously been so risk-averse and butt-covering that they draft broad, one-sided, edge-case contract clauses.
While lawyers traditionally play a role in ensuring legal compliance and drafting contracts, the concept of a Fair Terms Officer goes beyond the traditional approach. Fair Terms Officers could be dedicated business and legal professionals who specialise in reviewing and optimising contract terms specifically for fairness and balance rather than solely focusing on shifting 'on paper' risk.
Unlike the traditional risk-averse approach, Fair Terms Officers aim to create contracts that promote transparency, equality, and mutual benefit for all parties involved. They look at the contract experience as a whole, seeking to optimise it for the business and the other party.
They prioritise fairness and consider the impact of contract terms on the overall business relationship.
While lawyers can undoubtedly fulfil the role of a Fair Terms Officer, it requires a shift in mindset and approach. Fair Terms Officers strive to create contracts that are not only legally sound but also ethically and commercially fair. They consider the interests and needs of all parties and seek to balance rights and obligations to promote mutually beneficial outcomes.
By incorporating the expertise of Fair Terms Officers, businesses can go beyond the traditional risk-averse approach and create contracts that prioritise fairness, transparency, and collaboration.
Next steps
As the laws roll out later this year, the role of the Fair Terms Officer doesn't end after the rollout of the new laws.
These laws are here to stay, and the Fair Terms Officer will become increasingly important. The Fair Terms Officer's dedication to ensuring fairness in your contracts protects your business strengthens relationships, and maintains your reputation as a trustworthy supplier and customer.
So, get ready to welcome your new best friend, the Fair Terms Officer, and embark on a journey towards contract compliance that benefits everyone involved.
What do you think... will you create a Fair Terms Officer position at your company? Maybe you already are the Fair Terms Officer, and you didn't realise!
Don't leave your contracts to chance. You need a solid strategy in place for contracts on the buy side and the sell side. 💼📄
Book a contract strategy session, and let's talk Fair Terms:
Cheers,
Verity
