The Australian Federal Parliament recently passed significant amendments to the unfair contract terms regime to increase the scope of the regime and applicable penalties. The changes come into effect 9 November 2023 and will trigger essential changes for Australian businesses to implement over the next 12 months.

The Amending Act amends the unfair contract terms (UCT) provisions of the Competition and Consumer Act 2010 (Cth) (CCA) and the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act). Amendments to the UCT provisions of the CCA and ASIC Act include:

  • the introduction of a civil penalty regime prohibiting the use of, and reliance on, unfair contract terms by businesses;
  • expansion of protections to small businesses that are party to a small business contract;
  • clarification of factors the courts must consider when determining whether a contract is a standard form contract;
  • clarification of court powers to determine an appropriate remedy for breaches of the UCT regime;

In effect, the change will require businesses to review and, where necessary, alter all contracts that do not satisfy the incoming UCT requirements.

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