Protections for small business owners

Small business owners will have the same protections as consumers under a crackdown on unfair contracts.

Legislation which honoured an Abbott government election commitment, to allow a court to declare void an unfair term of a contract under $100,000 or $250,000 over more than one year, has passed parliament.

The government says small businesses need consumer-like protections because they lack the resources to negotiate terms and are unlikely to be able to absorb losses when they are unfair.

The lower house on Tuesday signed off on a Senate amendment to increase the threshold of contract values to $300,000 and $1 million.

The bill now proceeds for royal assent.