The Australian Securities & Investments Commission (ASIC) has recently ruled that PayPal’s local unit had unfair terms in its standard contracts with small business customers. According to the court, customers who did not report billing errors to PayPal within 60 days were forced to accept the fees as accurate. This legal action was brought against PayPal in September by ASIC, and the court found that these terms were not fair.
PayPal cooperated with ASIC during their investigation and agreed to remove the unfair term from their contracts on November 8, 2023. In addition, the court ordered PayPal to pay ASIC’s litigation costs as part of the resolution. PayPal has agreed to the declarations and has removed the disputed term from their contracts.
Sarah Court, Deputy Chair of ASIC, emphasized that unfair contract terms in standard form contracts with small businesses will not be tolerated. She stated that this decision serves as a reminder to all businesses to ensure fairness in their contracts and that ASIC will take action to protect consumers and small businesses.
This case highlights the importance of fair contract terms and the consequences for businesses that do not adhere to fair practices when dealing with small businesses. While it is important for businesses to have clear terms in their contracts, they must also ensure that those terms are reasonable and do not unfairly burden or disadvantage customers.
