Consumer Law

Unfair Contract Term

Also known as: unfair term

In plain English

A clause in a standard form contract that unfairly tips the balance toward the business can be struck out.

What it means

The Australian Consumer Law protects consumers and small businesses from unfair terms in standard form contracts. A term is unfair if it would cause a significant imbalance in rights, is not reasonably necessary to protect the business, and would cause detriment if relied on. A court or tribunal can declare an unfair term void, and since 9 November 2023 a business that proposes or relies on one can also face penalties. Courts and the ACCC enforce these rules.

How it's used

A gym contract letting the operator change fees at any time without notice may be an unfair contract term and void.

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