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Unfair contract terms

The Australian Consumer Law will protect small businesses from unfair terms in standard form contracts.

  • What contracts are covered?
  • Types of terms that may be unfair
  • Effect of having an unfair contract term
  • Contracts and terms that are not covered
  • If you think a term in your contract is unfair
  • More information

What contracts are covered?

The law applies to standard form contracts entered into or renewed on or after 12 November 2016, where:

  • it is for the supply of goods or services or the sale or grant of an interest in land
  • at least one of the parties is a small business (employs less than 20 people, including casual employees employed on a regular and systematic basis)
  • the upfront price payable under the contract is no more than $300 000 or $1 million if the contract is for more than 12 months.

If a contract is varied on or after 12 November 2016, the law applies to the varied terms.

A standard form contract is one that has been prepared by one party to the contract and where the other party has little or no opportunity to negotiate the terms – that is, it is offered on a ‘take it or leave it’ basis.

Types of terms that may be unfair

The law sets out examples of terms that may be unfair, including:

  • terms that enable one party (but not another) to avoid or limit their obligations under the contract
  • terms that enable one party (but not another) to terminate the contract
  • terms that penalise one party (but not another) for breaching or terminating the contract
  • terms that enable one party (but not another) to vary the terms of the contract.

Ultimately, only a court or tribunal (not the ACCC) can decide that a term is unfair.

Importantly, terms that set the upfront price payable under the contract are not covered by the law.

For further information about how a court determines whether a term is unfair, and examples of unfair terms, see: Determining whether a contract term is unfair.

Effect of having an unfair contract term

If a court or tribunal finds that a term is ‘unfair’, the term will be void – this means it is not binding on the parties. The rest of the contract will continue to bind the parties to the extent it is capable of operating without the unfair term.

Contracts and terms that are not covered

While the unfair contract terms laws cover most standard form contracts and contractual terms, there are a number of exceptions.

Excluded contracts

  • Contracts entered into before 12 November 2016 (unless renewed on or after this date)
  • Shipping contracts
  • Constitutions of companies, managed investment schemes or other kinds of bodies
  • Certain insurance contracts (e.g. car insurance)
  • Contracts in sectors exempted by the Minister – no sectors are currently exempt.

Excluded terms

  • Terms that define the main subject matter of the contract
  • Terms that set the upfront price payable
  • Terms that are required or expressly permitted by a law of the Commonwealth, or a state or a territory (e.g. permitted under the Franchising Code or another prescribed industry code).

If you think a term in your contract is unfair

  • Ask the other party to remove the term or amend it so it is no longer unfair
  • Talk to a lawyer
  • Contact your local state or territory consumer protection agency
  • Contact the ACCC.

For unfair terms in relation to financial products and services, contact ASIC(link is external).

More information

Unfair contract terms FAQs
Determining whether a contract term is unfair
Unfair contract terms - for consumers
New unfair contract terms law webinar(link is external)
Unfair terms in small business contracts - industry report

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ABOUT US

SubbiesUnited is not “anti builder”, we support strong builders.
We are “anti theft” of hard working subbies money.

It’s not just about the builders who go broke, businesses all over Australia Liquidate every day for a variety of reasons.

It’s about the ones that engage in calculated criminal behaviour such as providing false information to the regulators or inducing subbies to work on a site when they know they cannot or are not going to pay them because of a fraudulent scheme. Its about the participation of the banks, pre insolvency advisors and builder appointed Liquidators to fraudulently defeat creditors.

Liquidators should always be appointed by creditors to ensure a thorough investigation takes place.

We want the rogues investigated and prosecuted for fraud. 


  • SubbiesUnited was created to provide subbies with collaborative information on building companies that are showing signs of insolvency or struggling to pay their creditors. The signs are always there, we just need to get the message to each other before it happens.
  • We provide subbies with up to date news on builders in Administration or Liquidation and the best strategies to get a return.
  • There are some extremely litigious builders out there who would rather sue you than pay you. Often they sue you so they don’t have to pay you. We will expose them.
  • The construction industry is renowned for building companies setting up illegal Phoenix operations, shifting assets, then liquidating sending subbies broke. We work with other subcontractor & supplier organisations & Governments to stop what amounts to legalised theft on a massive scale though pre packaged liquidations. Insolvency is used as a means to defraud Subbies.
  • Our aim is to limit the financial damage before it happens with our “members only forum”, an early warning system for the benefit of all our members.

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