New developments in Unfair Contracts Law


As you probably know, your agency can be subject to having any unfair contract terms in its standard form contracts declared void by a court in certain circumstances, under the Australian Consumer Law.

On 6 November 2020, the Federal and State Ministers for fair trading and consumer protection agreed to extend the operation of the unfair contract laws and importantly, impose serious consequences for the use of an unfair contract term.

As a result of this agreement, changes will be made to the unfair contracts laws to:

  • make the use of unfair contract terms unlawful (rather than just void)
  • give a court power to impose a civil penalty on the use of unfair contract terms
  • extend the definition of small business to include businesses that employ up to 100 people or have an annual turnover of up to $10 million
  • do away with any price limitations for subject contracts
  • provide that repeat use of a contract template is an indicator of a standard form contract

Legislation will need to be drafted and passed by the Federal Government in order to make the agreed changes and we do not yet know the precise time frame for this.

Ahead of the changes, now is a good time to do a compliance check of the standard contract terms that your agency uses when dealing with consumers or small business. Contact Melinda Pugh if you would like Crown Law assistance with compliance.