The new unfair contract terms (UCT) regime under the Australian Consumer Law (ACL) commenced on 9 November 2023 for contracts entered into, renewed or extended after this date. The reforms make UCTs illegal for standard form contracts with either a consumer or small business, attracting substantial civil penalties of up to $50,000,000 per contravention. The ACCC or an injured party may also seek a declaration that a term is void or seek compensation, an injunction or other order considered appropriate by a Court.

The reforms do not change the test regarding whether a term is unfair, but they do expand the definition of a small business, meaning a far broader range of contracts may now be captured. A small business now includes businesses that employ fewer than 100 persons (up from 20 persons) or have a turnover of less than $10,000,000. There is no contract price threshold.

Please reach out at any time if you would like to discuss these changes and what they mean for you.