Small business education program

Types of terms that may be unfair

The law sets out examples of clauses in a contract that may be unfair, including terms that enable one party (but not the other) to:

  • vary the terms of the contract (e.g. change its prices or services at any time without prior notice)
  • automatically renew a contract without the other party’s express consent
  • avoid or limit their obligations under the contract (e.g. limit the contract provider’s liability where they have acted negligently)
  • terminate the contract
  • penalise the other party for breaching or terminating the contract.

Importantly, the law will not apply to terms that:

  • define the main subject matter of the contract
  • set the upfront price payable under the contract
  • are required or expressly permitted by another law.