The Terms Of My Contract Are Unfair: What Can I Do?
Updated: Feb 16
It is easy to think of a contract as sacred and final, as a document that stands alone and writes its own rules. However, it still has to play by the larger, overriding rules that exist outside of it.
Australian Consumer Law and other Australian legislation shape what is fair and unfair within a contract and make it possible for the terms within a contract to be unfair.
When the contract is examined by a legal services team, or a personal disagreement is elevated to court of law, it can quickly become clear just how important it is to get contract terms right in the first instance.
What is a consumer contract?
A consumer contract is a contract offered by a business or seller to the client or customer of the goods and services. A standard form contract is a contract of this kind made by one party, which is offered without negotiation, on terms the client can either accept or reject.
Australian courts can determine that a standard form contract is unfair, which will subsequently make the unfair terms within the contract void. If the term is fundamental to the contract, it could in fact make the entire contract invalid.
This determination may have wide-reaching impacts onto all standard form contracts, including those signed by other customers.
What are unfair contract terms?
The court balances up three different factors when determining if a contract term is unfair under Australian consumer law. All three of these factors must hold true for a contract to be determined unfair and therefore void.
A term may be deemed unfair if it would create a significant imbalance in rights and obligations, if term goes beyond protecting the interests of the benefiting party, and if the term, when applied, would be detrimental to the other party.
The courts also consider the transparency of the problematic terms, with vague or deliberately concealed terms tending to draw a harsher judgment. The term will also be considered in light of the contract more broadly.
A few key indicators that your contract could be unfair include:
An exclusion clause benefiting one party.
A termination or renewal clause that is one-sided.
Undue penalty for the client if they terminate or breach terms.
An unreasonable denial of liability or placing of liability on agents.
A clause that attempts to prevent one party from taking legal action.
Allowance for one party to change contract terms or price, especially if the contract does now also allow for the other party to have the right to terminate under these circumstances.
Is a client alleging unfair contract terms? Or are you a client who feels the terms in your contract are unfair?
In the interests of ensuring a best outcome, legal services are indispensable in such circumstances. The team at Arida Lawyers can represent your cause and provide sage legal counsel on matters of contract law, debt recovery, and consumer law. Contact Arida Lawyers on 1300 146 390 or firstname.lastname@example.org if you require legal services.
This article provides general information relevant to our expert services. It is not legal advice and should not be relied upon as such. If you are seeking legal advice, you should contact us for a free initial consultation. Liability limited by a scheme approved under Professional Standards Legislation.