The Bill to reform Australia’s unfair contract law was passed in November 2022. The new unfair contract law will take effect from 9 November 2023. Therefrom from 9 November 2023, it is an offence to enter into a standard form consumer contract or small business contract that contains an unfair term. It is also an offence to seek to rely on an unfair term in a standard form contract or small business contract. Substantial penalties will apply if a business breaches the new unfair contract law.
Members are reminded that the new unfair contract law may have a significant impact on your business or you as an individual if you use standard contracts. Members who are using standard contracts are encouraged to seek legal advice in relation to the impact of new unfair contract laws to your business sooner rather than later.
What is considered an unfair contract term?
A contract term is unfair if:
Australian Consumer Law, Schedule 2, section 25 provides a list of examples of unfair terms, including:
The table below contains a summary of the changes.
For any members who use standard contracts, MBA encourages you to conduct a thorough review of all your standard contracts to identify any contract terms that may pose a risk of being unfair.
If you need assistance in reviewing your standard contracts or advice on whether a contract term is unfair, please contact our Legal Team on (02) 6175 5900.