National laws for unfair contract terms
As a supplier, you must ensure your contracts comply with national unfair contract terms laws.
These protect consumers against contract terms that:
- would cause a significant imbalance in their rights and obligations under a contract
- are not reasonably necessary to protect the trader
- would cause detriment (financial or otherwise) to a consumer.
You must not include terms that allow you to:
- change the contract without reference to the consumer
- avoid responsibility when things go wrong
- avoid liability for negligence
- solely determine if the contract has been breached
- impose fees and charges not related to costs incurred.
If a court finds a term is unfair, that term is treated as if it never existed. If the contract can operate without the unfair term, it will still be binding. Any party to the contract can apply to a court for such a determination.
The unfair contract terms laws do not apply to a contract to supply goods or services, or financial products or services, from one business to another.
National unfair contract terms legislation is part of the Trade Practices Act 1974. For more information about the national legislation, download A guide to unfair contract terms law (RTF, 166KB) | A guide to unfair contract terms law (PDF, 1.8MB).
Victorian unfair terms laws for contracts entered before 1 July 2010
Contracts created between 9 October 2003 and 30 June 2010 in Victoria are subject to Part 2B of Victoria’s Fair Trading Act 1999, but any terms changed after 1 July 2010 are subject to the national laws.
For more information, download the guidelines to Victoria’s unfair contract terms laws for the above dates: Preventing unfair terms in consumer contracts: guidelines for businesses (PDF, 596KB) - guidelines based on Victoria’s unfair contract terms laws, October 2003-June 2010.
Consumer Affairs Victoria enforced the original laws by working with industry; for more information, view our Case studies page.
Monitoring and enforcement
We use our unfair terms compliance program to:
- promote and encourage fair and balanced trading practices
- encourage and support transparent practices in the marketplace.
We consider all complaints in accordance with our Compliance and enforcement policy.
Last updated: 21/03/2013