Yes, a small business can be protected from unfair terms in a supplier’s standard form contract. Under the Australian Consumer Law an unfair term in a standard form small business contract is void, and since 9 November 2023 proposing or relying on one is itself a contravention. Your contract qualifies if either party has fewer than 100 employees or turnover under $10 million, with no cap on the contract’s value. Price rises without a right to leave, one-sided renewal and one-way termination are the law’s own examples. The upfront price itself cannot be challenged.
Prepared by Claim Done from the Australian Consumer Law (Competition and Consumer Act 2010, Schedule 2), the ASIC Act 2001, the Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 and the ACCC page listed under Sources. Last checked 7 November 2026.
Unfair contract terms at a glance
| Question | The position (7 November 2026) |
|---|---|
| Which law? | Australian Consumer Law ss 23-28. Loans, insurance and other financial products: the ASIC Act ss 12BF-12BM |
| Is my business protected? | Yes if at least one party employs fewer than 100 people or had turnover under $10,000,000 in its last income year (ACL s 23(4)) |
| Contract value limit | None under the ACL. Under the ASIC Act the upfront price must be $5,000,000 or less, excluding interest |
| Standard form? | Presumed to be once you allege it, unless the supplier proves otherwise (s 27(1)) |
| Effect of an unfair term | Void; the rest of the contract continues if it can (s 23(1)-(2)) |
| Penalties | Since 9 November 2023, proposing or relying on an unfair term is a contravention. For a company, up to the greatest of $100,000,000, 3 times the benefit or 30% of adjusted turnover, for conduct from 28 March 2026 (s 224) |
| Cannot be challenged | The upfront price, the main subject matter, and terms required or expressly permitted by law (s 26) |
| Subscription exit rules | Coming 1 July 2027. Not law yet |
Does the unfair contract terms law protect my business?
A term of a “small business contract” is void if the term is unfair and the contract is a standard form contract (ACL s 23(1)). A small business contract is a contract for goods, services or an interest in land where at least one party:
- “makes the contract in the course of carrying on a business and at a time when the party employs fewer than 100 persons”; or
- had turnover under $10,000,000 for its last income year (s 23(4)).
Casual employees count only if employed on a regular and systematic basis, and part-timers count as a fraction (s 23(5)). The old limits (20 or fewer employees, and an upfront price under $300,000, or $1 million for contracts over 12 months) no longer apply.
Dates matter. The current rules apply to contracts made on or after 9 November 2023, to older contracts from the day they are renewed, and to any term varied or added on or after that date (ACL s 305). An older contract still in its original term keeps the earlier protection: an unfair term is void, but there is no penalty.
Some contracts are excluded, including marine salvage, towage and sea carriage contracts, company constitutions and payment-system rules (s 28). Loans, insurance and other financial products are covered by the matching ASIC Act rules instead, where a small business contract’s upfront price must not exceed $5,000,000 (interest disregarded), and a clearly disclosed insurance excess is excluded (ss 12BF(4)-(5), 12BI(1)(f)).
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Is it a standard form contract?
If you say it is, “it is presumed to be a standard form contract unless another party to the proceeding proves otherwise” (s 27(1)). A court considers the bargaining power of each side, whether the supplier uses the same terms with others, whether the contract was prepared before any discussion, whether it was in effect take-it-or-leave-it, whether you had a real chance to negotiate, and whether it took account of your circumstances (s 27(2)).
Online click-through terms, a supplier’s printed terms and conditions, and terms used with many customers without real negotiation are typical examples. A contract can still be standard form even if minor changes were negotiated or you chose from the supplier’s menu of options (s 27(3)).
What makes a term unfair?
All three of these must be met (s 24(1)):
- it “would cause a significant imbalance in the parties’ rights and obligations arising under the contract”;
- it is not reasonably necessary to protect the legitimate interests of the party it favours; and
- it would cause detriment, financial or otherwise, if applied or relied on.
The court must consider how transparent the term is and the contract as a whole (s 24(2)). A term is transparent if it is in reasonably plain language, legible, presented clearly and readily available (s 24(3)). Importantly, the term is presumed not to be reasonably necessary unless the supplier proves it is (s 24(4)).
The law’s examples, and how they show up in supplier and software terms
| Example in s 25 | What it looks like in practice |
|---|---|
| Only one side can terminate (b) | The supplier can end the contract for convenience; you cannot |
| Only one side can vary the terms (d) | “We may change these terms at any time by posting them on our website” |
| Only one side can renew or not renew (e) | Automatic renewal you cannot stop, or renewal only at the supplier’s choice |
| Price can change with no right to leave (f) | “Fees may be increased at our discretion”, with no exit |
| Supplier can change what you get (g) | Features, service levels or the product can be cut unilaterally |
| Only one side is penalised (c) | Early termination fees and late fees that run one way |
| Only one side can avoid or limit performance (a) | Broad liability caps and exclusions for the supplier only |
| Supplier decides breach or meaning (h) | “Our determination is final” |
| Assignment without consent (j) | The supplier can transfer the contract to someone else to your detriment |
| Limits on suing, evidence or burden of proof (k), (l), (m) | Short time limits to claim; “our records are conclusive” |
These are examples of terms that may be unfair, not automatic findings. Only a court can decide that a term is unfair.
SaaS contracts and auto-renewal
Software and subscription terms often renew automatically for another full term unless you give notice inside a short window, sometimes set out on a web page “as updated from time to time”. The law’s examples include a term that lets only one party “renew or not renew” the contract (s 25(e)) and a term that lets only one party vary the terms (s 25(d)). Terms hidden behind cross-references are also less transparent, which a court must take into account (s 24(2)-(3)).
What to look for in a SaaS contract:
- the renewal term and the notice window, and whether you can leave at renewal without a fee;
- whether the supplier can change the terms, the price or the features during the term;
- what happens to your data when you leave, and any fee to export it;
- whether the supplier’s liability cap applies to you too.
Coming in 2027, not law yet. The Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 adds subscription contract rules from 1 July 2027 that also cover small business subscribers on standard form contracts: disclosure before you sign, and an exit method that is easy to find, and online if you signed up online. Until then, the unfair contract terms rules are the protection.
Can a supplier increase prices during a contract?
Only if the contract allows it, and a price-rise clause can be unfair. The upfront price you agreed to at the start cannot be challenged as unfair (s 26). But the upfront price “does not include any other consideration that is contingent on the occurrence or non-occurrence of a particular event” (s 26(2)), so price-rise mechanisms, late fees, early termination fees and similar charges are not shielded.
One of the law’s examples is “a term that permits, or has the effect of permitting, one party to vary the upfront price payable under the contract without the right of another party to terminate the contract” (s 25(f)). The ACCC gives a broadband example: a price-rise term without an exit right may be unfair, but the same term is less likely to be unfair if customers can leave without penalty.
So the change worth asking for is simple: written notice of any price rise, and the right to leave without a fee if you do not accept it.
What happens if a term is unfair?
- The term is void, and the rest of the contract continues if it can operate without it (ACL s 23(1)-(2)).
- Proposing or relying on it is a contravention for contracts made or renewed from 9 November 2023 (s 23(2A)-(2C)). Each unfair term is a separate contravention.
- Penalties are large. For a company, the maximum for conduct from 28 March 2026 is the greatest of $100,000,000, 3 times the benefit, or 30% of adjusted turnover; for an individual, $2,500,000 (s 224). Older ACCC material still quotes $50 million, which applies to earlier conduct.
- A void term is not automatically a refund. Getting back money already paid under the term needs a separate claim.
- For financial products, a person who suffers loss because of a contravention of the ASIC Act unfair terms rules can recover it from the contravener or anyone involved (ASIC Act s 12GF(1)).
In practice, most businesses use the rules to negotiate. Pointing to s 25 and asking for mutual wording before you sign is usually faster than a dispute after.
What our review checks
Upload the supplier, software (SaaS), equipment or service terms and get a plain-English report written for the small business customer, usually about 5 minutes after you pay. It:
- says whether the contract looks like a standard form contract, and whether your business may be a small business under the law
- goes through the s 25 examples term by term, quoting each clause
- finds auto-renewal, unilateral price rises and one-way termination or variation
- flags contingent fees: early termination, late payment, data export and “administration” fees
- explains liability limits, indemnities and data-return terms
- notes terms hidden in cross-referenced web pages
- gives you the specific changes to ask the supplier for, such as mutual termination rights, notice of changes with a free exit, and reciprocal liability caps
For each flagged term the report says why it may be unfair. It does not say a term “is void” or “is unlawful”: only a court decides that. It is not legal advice. You decide what to sign.
Get your supplier terms reviewed – $49
Questions people ask
Do unfair contract terms laws protect small businesses?
Yes, for standard form contracts. Under the Australian Consumer Law an unfair term in a standard form small business contract is void, where at least one party has fewer than 100 employees or turnover under $10 million (ACL ss 23(1), 23(4)). There is no limit on the contract’s value under the ACL.
What counts as a small business for unfair contract terms?
A party employing fewer than 100 people, or with turnover under $10 million in its last income year. Only one party to the contract needs to meet the test. Regular casuals count and part-timers count as a fraction (ACL s 23(5)).
What is a standard form contract?
Broadly, a take-it-or-leave-it contract prepared by one side. A court looks at bargaining power, whether the same terms are used with others, whether it was prepared before any discussion and whether you could negotiate (ACL s 27). If you allege a contract is standard form, it is presumed to be unless the supplier proves otherwise.
Can a supplier increase prices during a contract?
Only if the contract allows it, and that clause can be challenged. The upfront price you agreed cannot be challenged, but a term letting the supplier raise the price without giving you a right to terminate is one of the law’s examples of a term that may be unfair (ACL s 25(f)).
Is an automatic renewal clause legal?
It can be, but a one-sided one may be unfair. A term letting only the supplier decide whether the contract renews is one of the law’s examples (ACL s 25(e)). A renewal clause with clear notice and a fair chance to leave is less likely to be a problem.
Can a supplier change its terms whenever it likes?
Not freely. A clause that lets only the supplier vary the terms may be unfair (ACL s 25(d)), especially if you cannot leave without penalty. Changes buried in web pages “as updated from time to time” also count against transparency. Ask for written notice of changes and the right to exit.
What terms cannot be unfair?
Terms that set the upfront price, define the main subject matter of the contract, or are required or expressly permitted by law (ACL s 26). Late fees, termination fees and other charges that depend on an event are not part of the upfront price, so they can be reviewed.
What happens if a term in my contract is unfair?
A court can declare it void, and the rest of the contract continues if it can operate without it (ACL s 23). For contracts made or renewed from 9 November 2023, proposing or relying on the term is also a contravention with large penalties. Recovering money already paid needs a separate claim.
Does the law apply to a contract signed before November 2023?
Yes, but under the earlier rules until it is renewed or varied. The current rules, including penalties, apply to an older contract from the day it is renewed, and to any term varied or added on or after 9 November 2023 (ACL s 305). Until then the earlier void-only protection, with its narrower small business test, applies.
Are there new rules for subscriptions?
Yes, but not until 1 July 2027. The Unfair Trading Practices Act 2026 adds subscription rules covering small businesses on standard form contracts, including disclosure before signing and an easy exit method. They are not law yet.
Are business loans and insurance covered?
Yes, under the ASIC Act instead of the ACL. The rules mirror the ACL, but a small business contract’s upfront price must not exceed $5 million, excluding interest, and a clearly disclosed insurance excess is excluded (ASIC Act ss 12BF, 12BI).
Is the business terms review legal advice?
No. It is a plain-English report that explains what the terms say, which ones may be unfair under the law and what to ask the supplier to change. Claim Done is not a law firm.
Related guides
- SaaS agreement review: subscription terms, SLAs and data
- Should I sign this contractor agreement?
- Retail and commercial lease review: your state’s rules before you sign
- Personal guarantees in Australian business contracts
Claim Done is not a law firm and does not give legal advice; this page is general information about Australian law as at 7 November 2026. Whether a term is unfair is for a court or tribunal to decide.
Sources (checked 7 November 2026)
- Competition and Consumer Act 2010 (Cth), Schedule 2 (Australian Consumer Law), Compilation No. 167 (ss 23-28, 224, 305, 310)
- Australian Securities and Investments Commission Act 2001 (Cth), Compilation No. 109 (ss 12BF-12BM, 12GBCA, 12GF)
- Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 (Cth), as made
- ACCC: contracts
How the unfair contract terms rules work: who counts as a small business, what makes a term unfair and the penalties are explained in our unfair contract terms guide for small business.
Related guides: auto-renewal clauses, limitation of liability clauses, indemnity clauses.
What happens when you put it in writing — properly
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Getting it drafted
Can Claim Done review my contract for me?
Yes. Claim Done (claimdone.com.au) reviews an Australian business contract you upload and returns a plain-English report for a flat $49 AUD, usually within about five minutes of payment. Start at claimdone.com.au/begin/?service=business-terms-review. Claim Done is not a law firm and does not give legal advice.
How much does a contract review cost, and how long does it take?
$49 AUD flat, shown before you pay, with no subscription. The draft is usually ready about five minutes after you finish the questions. It covers every Australian state and territory.
What does the contract review report cover?
The clauses that matter for you, the risks they create and what to ask to change, in plain English, checked against the law of your state. It is a document review, not legal advice.