Examples of Unfair Contract Terms

Section 25 of the Australian Consumer Law (ACL) sets out examples of the kinds of terms of a small business contract that may be unfair.  They are:

  • a term that permits, or has the effect of permitting, one party (but not another party) to avoid or limit performance of the contract;

  • a term that permits, or has the effect of permitting, one party (but not another party) to terminate the contract;

  • a term that penalises, or has the effect of penalising, one party (but not another party) for a breach or termination of the contract;

  • a term that permits, or has the effect of permitting, one party (but not another party) to vary the terms of the contract;

  • a term that permits, or has the effect of permitting, one party (but not another party) to renew or not renew the contract;

  • 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;

  • a term that permits, or has the effect of permitting, one party unilaterally to vary the characteristics of the goods or services to be supplied, or the interest in land to be sold or granted, under the contract;

  • a term that permits, or has the effect of permitting, one party unilaterally to determine whether the contract has been breached or to interpret its meaning;

  • a term that limits, or has the effect of limiting, one party’s vicarious liability for its agents;

  • a term that permits, or has the effect of permitting, one party to assign the contract to the detriment of another party without that other party’s consent;

  • a term that limits, or has the effect of limiting, one party’s right to sue another party;

  • a term that limits, or has the effect of limiting, the evidence one party can adduce in proceedings relating to the contract;

  • a term that imposes, or has the effect of imposing, the evidential burden on one party in proceedings relating to the contract; and

  • a term of a kind, or a term that has an effect of a kind, prescribed by the regulations.

 

For further information regarding unfair contract terms legislation, see our article here.

 

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