The new unfair contract terms laws come into effect on 9 November 2023.
The new laws –
The new maximum penalties apply to unfair contract terms, amongst other things, and can include penalties of up to $50 million or higher depending on the value of the contract or the annual turnover of the business.
What contracts does this apply to?
The new laws apply to standard form consumer contracts. It may apply to your terms and conditions on quotes, special conditions included in your MBA or other building contracts as well as purchase orders where these documents form part of your contract. In deciding what a standard form contract is, a court will consider whether:
Because the starting point is that every contract is a standard form contract, members are encouraged to review their specific contracts and any special conditions they include to understand whether their contract is a standard form contract and if it contains any unfair contract terms.
What is an unfair contract term?
A contract term is unfair if it:
What are some examples of unfair contract terms?
The ACCC gives the following examples of unfair contract terms:
If you are using your own special conditions or a non-MBA contract, we suggest having your contract reviewed prior to 9 November 2023. If you would like to discuss unfair contract terms or are interested in reviewing any of your contracts, please contact our member services team on 6175 5900.