Commercial: Unfair contract terms (UCT)

2025 checklist for SMEs

The rule-change that bites

Since 9 Nov 2023, it’s illegal to propose, use or rely on unfair terms in standard form consumer or small-business contracts. Courts can impose significant penalties.

Who’s a “small business”?

Threshold expanded — a business with <100 employees or < $10m turnover (previous income year) can be protected by the regime. 

What’s a “standard form” contract?

Template “take-it-or-leave-it” documents with little genuine negotiation. If a term creates significant imbalance, isn’t reasonably necessary to protect legitimate interests, and would cause detriment, it risks being “unfair”.

Penalty risk

Penalties for UCT contraventions sit within the ACL’s higher penalty framework (for companies, the greater of $50m, 3× the benefit, or 30% of adjusted turnover during the breach period). 

Your 7-point 2025 review

1. Identify all standard-form contracts (Ts&Cs, SaaS, subscriptions, supply, franchising).
2. Delete or re-draft one-sided termination, auto-renewal, liability exclusions, and unilateral variation clauses.
3. Ensure price change and fee clauses are transparent and tied to objective triggers.
4. Add cooling-off, reasonable notice, and balanced remedies.
5. Highlight key terms during sign-up/renewal; keep version control. 
6. Train sales and customer support on fair-contracting.
7. Monitor ACCC actions (eg, misleading promotion cases) as practical guidance on fairness standards.

We can run a fast contract audit and provide a red-line pack aligned with ACCC guidance.

General information only. Get advice before updating your templates.