Unfair Contract Terms – Is there a new Problem?

Since our article in November 2018, the Unfair Contracts Terms ("UCT") regime¹ has been strengthened to apply to a much greater pool of contracts, and so some businesses which previously were not affected by it, now suddenly find themselves in potentially very dangerous waters. The principles and recommendations in that article have not diminished at all, but the adverse repercussions for putting a contract with UCTs before a small business or individual have been substantially strengthened.

So, what has changed? Well – the UCT regime now has some very sharp teeth!

Illegality and serious penalties

From 10 November 2023, UCTs are prohibited and, unlike the previous regime which merely made offending provisions unenforceable and void, entities which now propose contracts containing UCTs will be subject to very substantial penalties. For companies, the penalties can be up to $50 million or 3 times the value of the benefit obtained (whichever is greater) or a