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.
If a party subsequently seeks to apply or rely on a term that a court has declared unfair, it is a breach of the ACL and the court may grant:
- an injunction restraining the party from acting upon the term
- compensation
- an order to provide redress to non-party consumers or small businesses
- any other orders the court thinks appropriate.