# Unfair Contract Term Lawyers in Melbourne

Source: https://mklawgroup.com.au/consumer-law-lawyers/unfair-contract-terms/
Last updated: 2026-08-10

A term in a standard form contract that only protects the other side may be void, and the business that relies on it now risks massive penalties. We challenge unfair terms and audit contracts that contain them.

## The clause is probably in there because nobody ever pushed back

You signed because you had no choice. The supplier, franchisor, lessor or platform handed you their standard terms, and the deal was take it or leave it. Now a clause is doing exactly what it was built to do: the price has jumped mid-term, the contract has renewed without asking you, or the other side has walked away with no liability while you are locked in.

The Australian Consumer Law calls that an unfair contract term, and the consequences of using one have changed sharply in the last few years. An unfair term used to be merely void. Now it is illegal to propose, use or rely on one, and a company that does so faces penalties of up to the greater of $100 million, three times the benefit gained, or 30 per cent of its adjusted turnover for each unfair term. Individuals face up to $2.5 million. The ACCC has listed unfair terms in small business contracts among its 2025-26 enforcement priorities and sued Amazon over its Prime subscription terms in June 2026.

In practice that shifts the conversation. A business told its clause is unfair is now weighing a penalty rather than a modest legal risk against a commercial gain, so a single letter setting out why the clause fails the legal test often ends the argument. Call [1800 130 120](tel:1800130120) and read us the clause. The first call is free.

## The three-part test we run your clause through

A term is unfair if it does all three of the following:

- causes a significant imbalance in the parties' rights and obligations
- is not reasonably necessary to protect the legitimate interests of the party it favours
- would cause you detriment, financial or otherwise, if it were relied on

The law lists the usual suspects: terms letting one side vary the price or the contract unilaterally, terminate at will, renew automatically, limit their own liability, or penalise you but not them for breaching. Being transparent and plainly worded does not save a clause, though a buried one rarely survives the test.

> When a court declares a term in a standard form contract unfair, the same clause is exposed in every other copy of that contract the business has issued. A single declaration therefore reaches a lot further than the one contract in front of the court, which is a large part of why these disputes settle quickly.

## Who the regime protects

You are covered as an individual consumer, and as a small business if you employ fewer than 100 people or turned over less than $10 million in the previous income year. There is no longer any cap on the contract value, so a $2 million equipment finance deal can qualify alongside a $60 gym membership. The contract must be standard form, which means prepared by the other side and offered without any real opportunity to negotiate. If they claim you could have negotiated, the law makes them prove it.

Franchise agreements are the sharpest example of the type. A franchisee signs the network's document unchanged and then lives inside it for years, so an unfair clause has a long time to do damage. Where the clause is only one part of a wider [franchise dispute](https://mklawgroup.com.au/franchise-lawyers/franchise-disputes/), we run the two together rather than in sequence.

### Bring us the contract before you comply with the clause

Most people call after the clause has already cost them money, once the price rise has been paid or the cancellation window has quietly closed, and by then the money is much harder to get back. We read the contract, tell you which terms fail the unfairness test, and put the other side on notice before you hand over anything else. If the contract is fair and the clause holds up, we tell you that too, on the first call, for nothing.

## What we do with an unfair clause

For most clients the fix is a letter. We set out why the term causes a significant imbalance, why it is not reasonably necessary to protect the other side, and what detriment it causes you, then we invite them to stop relying on it. Faced with penalty exposure per term, most businesses do. Where they dig in, we seek a declaration that the term is void, which for a consumer or small business contract usually means bringing a [VCAT consumer dispute](https://mklawgroup.com.au/vcat-lawyers/vcat-consumer-disputes/) rather than a court proceeding. Either way the rest of the contract keeps running without the offending clause.

If you are on the other side of this page, a Melbourne business whose own standard terms were drafted before 2023, your auto-renewal, termination and price variation clauses are now penalty risks sitting in every contract you issue. We audit standard terms and redraft the clauses that would not survive a challenge, which is [commercial contract](https://mklawgroup.com.au/contract-lawyers/commercial-contracts/) drafting rather than litigation and costs a great deal less than defending one. Where the real fight is about performance of the contract rather than fairness of its terms, our [contract lawyers](https://mklawgroup.com.au/contract-lawyers/) take it from there.

**Every day you comply with an unfair clause costs you money.** Read us the clause on a free call. We will tell you whether it fails the ACL test, what a challenge would cost, and whether one letter is likely to end it.

## Talk to us before the clause bites again

If a standard form contract is squeezing you, or your own terms need a penalty-proofing review, call [1800 130 120](tel:1800130120) or use the form on this page. Unfair terms are one strand of the wider protections our [consumer law lawyers](https://mklawgroup.com.au/consumer-law-lawyers/) work with, and they often travel with [consumer guarantee](https://mklawgroup.com.au/consumer-law-lawyers/consumer-guarantees/) problems in the same dispute. One free call tells you where you stand on both.

## Frequently asked questions

### What makes a contract term unfair under the ACL?

The Australian Consumer Law sets a three-part test. The term must cause a significant imbalance in the parties' rights, it must not be reasonably necessary to protect the legitimate interests of the party it favours, and it must cause you detriment if relied on. All three must be met, and the court looks at the contract as a whole, including whether the term was presented transparently. Clauses that let one side change the price, terminate at will, or auto-renew without notice are the classic examples the law itself lists.

### What are the penalties for using an unfair contract term?

It is now illegal to propose, use or rely on an unfair term in a standard form contract, and each unfair term can be a separate contravention. A company faces the greater of $100 million, three times the benefit obtained, or 30 per cent of adjusted turnover during the breach period. Individuals face up to $2.5 million per contravention. Until late 2023 the only consequence was that the term was void, which is why so many old contracts still carry these clauses, and why a business that keeps relying on one today is taking a risk it has not priced.

### Does the unfair terms regime protect my small business?

Yes, if your business employs fewer than 100 people or turned over less than $10 million in the previous income year, and the contract is a standard form contract. There is no longer any cap on the contract value for goods and services contracts, so a large equipment finance or supply agreement can still qualify. Most cafes, trades, medical practices and start-ups in Melbourne fall inside the thresholds.

### What counts as a standard form contract?

One prepared by the other party and offered on a take-it-or-leave-it basis, with no real chance to negotiate. Phone and software subscriptions, gym memberships, franchise agreements, equipment leases and most supplier terms qualify. If a business asserts the contract is not standard form, it carries the burden of proving that. Having rejected or negotiated minor terms does not stop a contract being standard form.

### Can I just ignore a term I think is unfair?

That is a gamble we would not recommend without advice. If a court or VCAT declares the term unfair it is void from the start and the other side cannot enforce it, while the rest of the contract keeps operating. Until then, ignoring it invites a dispute on the other side's timetable. The safer route is a letter putting the counterparty on notice that the clause is unfair and that relying on it now carries penalty risk. That letter changes negotiating positions quickly, and we can usually tell you on a free first call whether the clause fails the test.

### Which clauses is the ACCC targeting right now?

Unfair contract terms in small business contracts are on the ACCC's 2025-26 compliance and enforcement priorities, with a stated focus on automatic renewal clauses, early termination fees and non-cancellation clauses. In June 2026 the ACCC sued Amazon in the Federal Court over terms in its Prime subscription contracts. If those clauses sound like something in a contract you signed, or something in the terms your own business uses, it is worth a call.

## Contact MK Law Group

- Phone: 1800 130 120 (24/7)
- Email: marcus@mklawfirm.com.au
- Office: 2/212 Barkly Street, St Kilda VIC 3182
- Enquiry form: https://mklawgroup.com.au/contact/
- The first call is free.