What Small Businesses Need to Know About New Unfair Contract Laws


Big changes are on the horizon for businesses in Australia, especially for those dealing with consumers and small enterprises. The Australian Consumer Law is getting a makeover to add more shields for the little guys against unfair contract terms. Starting from November 9, 2023, businesses need to be on their toes to ensure their standard form contracts play fair. Let’s break down what’s happening and why it matters.

The Current Scenario

Right now, the law can only declare unfair terms void, which isn’t much of a threat. Standard form contracts, the kind where you often have no choice but to accept the terms as they are, have been leaving consumers and small businesses in a bit of a bind. They’re usually stacked in favour of the party offering them, and there’s not much motivation to change that.

What’s Changing

Come November 9, 2023, the rules are getting a serious upgrade. Firstly, more small businesses will be covered by these protections. If your business has an annual turnover of less than $10 million or fewer than 100 employees, these rules apply to you.

Penalties That Pack a Punch

The game-changer is the introduction of hefty penalties for unfair terms. Courts will now have the power to slap significant fines on businesses that include unfair terms in their standard form contracts. Individuals could face up to $2.5 million in penalties, while businesses might get hit with the greater of $50 million or three times the value of the benefit they gained from the unfair terms.

Why It Matters

This isn’t just a legal tweak; it’s a game-changer for businesses, big and small. The Australian Competition and Consumer Commission (ACCC) is urging businesses to take a good look at their standard form contracts before the changes kick in. The goal is simple – make sure your contracts are fair because the consequences of slipping up are about to get serious.

What Businesses Should Do

With the clock ticking, businesses need to be proactive. Review your standard form contracts. Are they fair to the other party, especially if it’s a small business or consumer? Look out for terms that could be deemed unfair, like those heavily favouring one side. It’s not just about complying with the law; it’s about building trust and fairness in your business relationships.


The winds of change are blowing through Australian business law, and it’s small businesses and consumers who stand to benefit the most. The shift towards fairer standard form contracts is a step towards levelling the playing field. So, businesses, take note – the time to review and adjust your contracts is now. Come November 9, 2023, fairness isn’t just good business; it’s the law.