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Unfair contract terms

As a supplier, you must ensure your standard form consumer contracts comply with national unfair contract terms laws.

These protect consumers against contract terms that:

  • would cause a significant imbalance in the parties' rights and obligations under a contract;
  • are not reasonably necessary to protect the trader; or
  • would cause detriment (financial or otherwise) to a consumer.

You must not include terms that allow you to:

  • change the contract without reference to the consumer;
  • avoid responsibility when things go wrong;
  • avoid liability; or
  • determine if the contract has been breached.

If a court finds a term is unfair, that term is treated as if it never existed. If the contract can operate without the unfair term, it will still be binding. Any party to the contract can apply to a court for such a declaration that a term of a contract is unfair.

For more information about unfair contract terms, A guide to the unfair contract terms law (ACL) is available.

Examples of unfair contract terms identified in specific industries include:

  • window and floor covering agreements;
  • furniture removal agreements; or
  • event ticketing terms.

A law to protect small businesses from unfair terms in business-to-business standard form contracts offers similar protections to small businesses. The Australian Competition and Consumer Commission (ACCC) identified common terms of concern in specific industries in Unfair terms in small business contracts: A review of selected industries. A separate unfair contract terms regime applies to financial services contracts under the Australian Securities and Investments Commission Act 2001.

Monitoring and enforcement

We use our unfair terms compliance program to:

  • promote and encourage fair and balanced trading practices; and 
  • encourage and support transparent practices in the marketplace.

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