18 October 2023
From 9 November 2023, Australia’s unfair contract terms regime under the Australian Consumer Law is changing substantially including:
Until 9 November 2023, the unfair contract terms regime applies to small business contracts where one of the parties to a contract is a business that employs fewer than 20 employees, and the upfront contract value threshold is below $300,000.
From 9 November 2023, a contract under the Australian Consumer Law will now be considered a ‘small business contract’ where a party to the contract:
Given these changes, the unfair contract laws will now apply to a much larger pool of standard form contracts than before.
Parties will now be prohibited from proposing, using, or relying on unfair terms in a standard form contract. Courts will now have the power to impose a civil penalty on the party that is responsible for proposing, applying, or relying on a standard form contract term that it determines is unfair under the Australian Consumer Law.
Previously, if Courts found a term to be unfair, the term was automatically void. Additional remedies are introduced granting the Courts greater discretion in determining remedies such as issuing injunctions and orders to void, vary, or refuse to enforce part or all of the contract to prevent loss or damage.