Small business education program

Determining whether a term is unfair

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

In making this decision, a court considers how transparent the term is, as well as the overall rights and obligations of each party under the contract.

Terms that may not be transparent include clauses that are:

  • hidden in fine print or schedules
  • phrased in legal, complex or technical language.

However, even a transparent term can still be unfair.

The fairness of a particular term must also be assessed in light of the contract as a whole, including any other terms that may offset the unfairness of the term. For example, a potentially unfair term may be counterbalanced by additional benefits being offered to the other party. This means that a term could be unfair in one contract but not unfair in another.