The unfair contract term protections for consumers were introduced as part of the broader national Australian Consumer Law, which was fully implemented from 1 January 2011. Aspects of this law, including the unfair contract term protections, are also reflected in the Australian Securities and Investments Commission Act 2001.

The unfair contract terms law applies to a term in a contract if:

• it is a consumer contract
• the contract is a 'standard form contract', and
• the contract is for a financial product or service.

For standard form consumer contracts of insurance, the unfair contract term protections apply to contracts entered into, or renewed, on or after 5 April 2021. If a term of a contract entered into before 5 April 2021 is varied on or after 5 April 2021, the protections will apply to that term but not to the rest of the contract.

• Find out more about unfair contract term protections for consumers

Like consumers, small businesses have limited market power and a reduced ability to vary 'take it or leave it' contracts. In recognition of this, the unfair contract terms law also provides protections for small businesses.

The unfair contract term protections apply to standard form small business contracts entered into, or renewed, on or after 12 November 2016, where:

• the contract is for the supply of financial goods or services
• at least one of the parties is a 'small business' (i.e. a business employing fewer than 100 people, including casual staff employed on a regular and systematic basis, and part-time employees as an appropriate fraction of a full-time equivalent employee), or has a turnover for the last income year of less than $10 million, and
• for contracts for financial products or services, the upfront price payable under the contract does not exceed $5 million (the ‘cap’) – for other types of contracts, there is no cap.

For standard form small business contracts of insurance, the unfair contract term protections apply to contracts entered into, or renewed, on or after 5 April 2021, where the above criteria are met.

If a term of a small business contract entered into before 12 November 2016 is varied on or after 12 November 2016, the protections will apply to that term but not to the rest of the contract. If a term of a small business contract of insurance entered into before 5 April 2021 is varied on or after 5 April 2021, the protections will apply to that term but not to the rest of the contract.

• Find out more about unfair contract term protections for small businesses