The standard quote, terms and conditions, or service agreement you reuse for every customer could now expose your business to serious penalties — not because of anything you’ve done wrong in the work, but because of what’s written in the fine print. Since late 2023, unfair contract terms in standard-form contracts have been unlawful in Australia, not merely unenforceable, and in 2026 the maximum penalties were doubled. For any business using template contracts with customers or other small businesses, reviewing that fine print has become genuinely important.
This guide explains what unfair contract terms are, what changed, how to spot them, and how to protect your business — written in plain terms for Australian trades, construction and professional-services owners. It’s general information, not legal advice, so seek proper advice on your contracts.
WHAT ARE UNFAIR CONTRACT TERMS?
Unfair contract terms are provisions in a standard-form contract that create a significant imbalance between the parties, aren’t reasonably necessary to protect the party who benefits, and would cause detriment if relied upon. In plain terms, they’re clauses that unfairly favour one side, usually the business that wrote the contract.
They arise in standard-form contracts — the take-it-or-leave-it agreements a business offers without real negotiation, like most quotes, terms and conditions and service agreements. The unfair contract terms rules exist to stop these one-sided templates being used against consumers and small businesses.
WHAT CHANGED AND WHY IT MATTERS
The law shifted significantly. Since November 2023, unfair contract terms in standard-form contracts with consumers and small businesses are not just voidable — they’re unlawful, and proposing, applying or relying on one attracts civil penalties under the Australian Consumer Law.
The stakes rose again in 2026, when the maximum penalties were doubled. Crucially, each unfair term in each contract can be a separate contravention — so a flawed template used across many customers multiplies the exposure. That’s what makes unfair contract terms a real risk rather than a technicality: one bad clause, repeated, becomes many.
WHAT UNFAIR TERMS CAN LOOK LIKE
The law looks at the overall balance, but terms that commonly raise concerns include:
- One-sided cancellation — letting you cancel or change freely while the other party can’t.
- Unbalanced liability — limiting your responsibility heavily while giving the customer none of the same protection.
- Automatic rollovers — renewing agreements automatically with little notice or easy exit.
- Unilateral changes — letting you change price or terms after signing without agreement.
- Excessive penalties — imposing disproportionate charges on the other party for breach.
Whether a term is actually unfair depends on the contract as a whole, which is why unfair contract terms need proper review rather than guesswork.
HOW TO PROTECT YOUR BUSINESS
1. Review your standard contracts
Go through the quotes, terms and agreements you reuse and look at them with fresh eyes. Unfair contract terms usually hide in templates nobody has revisited in years.
2. Look for one-sided clauses
Identify anything that heavily favours you at the customer’s expense. Balance is the heart of avoiding unfair contract terms.
3. Make terms clear and fair
Write clauses in plain language that a customer could reasonably accept as fair. Transparency and balance are your best protection.
4. Keep terms necessary and proportionate
Make sure each clause is genuinely needed to protect your legitimate interests, not just there to give you the upper hand. Reasonable necessity is part of the test.
5. Get your contracts reviewed
Have a professional check your standard-form contracts against the current rules. Given the penalties, a proper review is cheap insurance.
WHY A BAD TEMPLATE MULTIPLIES THE RISK
The single most important thing to understand about unfair contract terms is how the risk scales. A business doesn’t usually have one contract — it has one template used across dozens, hundreds or thousands of customers. Because each unfair term in each contract can count as a separate contravention, a single problematic clause sitting in a widely-used template isn’t one small risk; it’s the same risk multiplied by every customer you’ve issued it to. This is the opposite of how most owners think about their standard terms, which they tend to set once and forget. Under the current regime, that set-and-forget template is precisely where the danger lies, because a clause that seemed harmless when drafted can now be unlawful and repeated across your whole customer base. Reviewing the template you reuse is therefore far more valuable than reviewing any single deal.
UNFAIR CONTRACT TERMS FOR TRADES AND CONSTRUCTION
Trades and construction businesses very often rely on standard quotes, terms and conditions and service agreements, frequently drawn up years ago or borrowed from somewhere and never reviewed — exactly the situation the unfair contract terms rules target. Common problem areas include heavily one-sided cancellation or deposit-forfeiture clauses, terms letting the business change price or scope unilaterally, and liability clauses that protect the business while leaving the customer exposed. The fix isn’t to abandon sensible protections — you’re entitled to reasonable terms that protect your legitimate interests — but to make sure they’re balanced, necessary and clearly written. Given that a trade business might issue the same template to hundreds of customers a year, getting that template reviewed against the current rules is a small cost against a genuinely multiplied risk.
COMMON UNFAIR CONTRACT TERMS MISTAKES TO AVOID
- Never reviewing your template. Set-and-forget standard terms are where unfair contract terms typically hide.
- Assuming it’s only voidable. Since 2023 these terms are unlawful and carry penalties, not just unenforceability.
- Overreaching to protect yourself. Heavily one-sided clauses are exactly what the rules target; balance is safer.
- Ignoring the multiplier. One bad clause across many contracts multiplies contraventions and exposure.
Making sure your commercial documents protect rather than expose you is core ACS Consulting territory. The Strategy & Business Planning service treats contract and compliance risk as part of running the business well, while the Operations & Process Improvement service builds the review habits that keep your standard documents current, and the Construction Estimation & Cost Consultancy service helps ensure your quotes and terms are commercially sound. The free Perth SME Operational Audit Checklist helps you find where your documents need attention. For authoritative guidance, the ACCC, the Australian Government’s contracts and tenders resources, and the Australian Small Business and Family Enterprise Ombudsman are the references to use. As this isn’t legal advice, have a qualified professional review your specific contracts.
FREQUENTLY ASKED QUESTIONS
What are unfair contract terms?
Unfair contract terms are clauses in a standard-form contract that create a significant imbalance between the parties, aren’t reasonably necessary to protect the party who benefits, and would cause detriment if relied upon. They typically appear in take-it-or-leave-it templates and unfairly favour the business that wrote them.
What changed with the unfair contract terms law?
Since November 2023, unfair contract terms in standard-form contracts with consumers and small businesses are unlawful rather than merely voidable, attracting civil penalties. In 2026 the maximum penalties were doubled, and each unfair term in each contract can be a separate contravention.
How do I know if my contract has unfair terms?
Look for clauses that heavily favour you over the customer — one-sided cancellation, unbalanced liability, unilateral changes to price or terms, or disproportionate penalties. Whether a term is actually unfair depends on the whole contract, so a professional review is the reliable way to check.
Why is a standard template such a risk?
Because you use the same template across many customers, and each unfair term in each contract can count as a separate contravention. A single problematic clause in a widely-used template multiplies your exposure by every customer you’ve issued it to, which is why reviewing the template matters most.
CONCLUSION
Unfair contract terms in your standard-form contracts are now unlawful and, since 2026, carry doubled penalties — with each term in each contract a potential separate contravention. Review your standard contracts, look for one-sided clauses, make terms clear and fair, keep them necessary and proportionate, and get them professionally reviewed.
Because a single bad clause repeated across your customers multiplies the risk, reviewing the template you reuse is one of the more valuable compliance steps you can take in 2026. As this isn’t legal advice, have your specific contracts checked by a qualified professional.
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Email: zoey@acsconsulting.com.au
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