Unfair contract term claim deadline in Australia
Claims that a contract term is unfair under the Australian Consumer Law (ACL) must be brought within six years of the cause of action arising (section 236 Competition and Consumer Act 2010 (Cth), applying state and territory limitation periods). Since November 2023, unfair contract terms in standard form consumer and small business contracts are prohibited and attract penalties (up to $50 million for corporations). The ACCC can also bring enforcement action — there is no specific deadline for ACCC enforcement beyond the general six-year limitation.
Who can bring a claim
Consumers and small businesses that are party to a standard form contract can challenge unfair terms under Part 2-3 of the ACL. Since November 2023 (Treasury Laws Amendment (More Competition, Better Prices) Act 2022), the definition of small business contract was expanded — it now covers contracts where at least one party employs fewer than 100 people or has turnover under $10 million, regardless of contract value.
What makes a term unfair
A term is unfair if it: causes a significant imbalance in the parties' rights and obligations; is not reasonably necessary to protect the legitimate interests of the party who benefits; and would cause detriment to the other party if relied upon (section 24 ACL). Common examples include unilateral variation clauses, automatic renewal without notice, and one-sided termination rights.
How I help identify unfair terms
When reviewing contracts, I flag terms that are likely unfair under the ACL test — particularly unilateral variation, termination, and liability limitation clauses in standard form contracts. I reference the ACCC's published guidance and recent Federal Court decisions on unfair contract terms to support the analysis.
Common issues
- Since November 2023, unfair contract terms attract penalties — this is a significant change from the previous void-only remedy
- The expanded small business definition captures many more contracts than before
- Standard form contracts are presumed to be standard form unless the other party proves otherwise (section 27(2) ACL)
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