Unfair Contract Terms: Seven Clauses to Check in Your Quote

Since 9 November 2023, the unfair contract terms law has had teeth. An unfair term in your standard quote terms is no longer just a clause a court can knock out. Putting it in front of a customer is itself a breach of the Australian Consumer Law (ACL), and so is relying on it later. The ACL is national law, set out in Schedule 2 to the Competition and Consumer Act 2010. Its unfair contract terms rules sit in sections 23 to 27 of that Schedule. They are legal requirements, not a voluntary code. Each unfair term counts as a separate contravention. The maximum penalty for a company doubled on 28 March 2026. The Australian Competition and Consumer Commission (ACCC), the national regulator, has also named cancellation clauses and automatic renewals as enforcement priorities for 2026–27.

None of that means your terms are unfair. It means the paragraph at the bottom of your quote is worth an hour before the next one goes out. Below: which contracts the unfair contract terms rules cover, and how a court decides whether a term is unfair. Then the clauses in tradie quote terms that deserve a second look, what the rules say about deposits, and what changes for maintenance plans in July 2027.

Which of your contracts the rules cover

The unfair contract terms rules apply to two kinds of contract. Most tradie work falls into one or the other.

• Consumer contracts: work for a householder, bought “wholly or predominantly for personal, domestic or household use”. That covers the kitchen rewire, the blocked drain and the pest treatment at a family home.
• Small business contracts: work where at least one party employs fewer than 100 people or turned over less than $10 million in its last income year. There is no longer any cap on the contract price. A large job for a small strata manager or a café owner is covered too.

The contract also has to be a standard form contract. The law presumes it is one if someone says so, and leaves it to the business to prove otherwise. A quote template you send to every customer, with terms nobody negotiates, is the textbook case. Letting the customer pick from options you set, or agreeing a minor change, does not stop it being standard form (s 27(3)).

The same definition also protects you. When a head contractor, a builder or a supplier hands you their standard terms, your own business is usually small enough to be the protected party.

How a court decides a term is unfair

A term is unfair under section 24 only if all three of these are true:

1. it causes a significant imbalance between the parties’ rights and obligations;
2. it is not reasonably necessary to protect the legitimate interests of the business that benefits from it;
3. it would cause the customer detriment, financial or otherwise, if it were relied on.

Two details decide more cases than they look like they should. First, the second limb is presumed against you: the business has to prove the term protects a legitimate interest, not the customer that it doesn’t. Second, the court must look at how transparent the term is: plain language, legible, clearly presented and readily available. A reasonable clause in six-point grey text on page three can still count against you.

Only a court makes the final call. As at May 2026, the Treasury’s review of the amended protections reported that no court had yet imposed a penalty for an unfair term under the new regime. The ACCC had so far used court-enforceable undertakings instead. That tells you where enforcement has started, not that a clause is safe.

Where the price exclusion stops

Section 26 keeps the upfront price out of the fairness test. If you quote $4,800 for a switchboard upgrade and the customer accepts it, nobody can later argue the $4,800 was unfair.

The exclusion only covers a price disclosed before the contract that does not depend on something happening later. A cancellation fee, a forfeited deposit or a late payment fee is not part of the upfront price, because each is triggered by an event. Those are exactly the terms the fairness test reaches.

Seven clauses in tradie quote terms worth a second look

Section 25 lists examples of terms that may be unfair. None of them is automatically unfair; each still has to fail all three limbs of the test above. Read against that list, these are the clauses that turn up in trade terms and carry the most risk.

“Deposits are non-refundable”

A blanket forfeiture lets you keep money when the customer ends the contract, whatever it has actually cost you. That sits close to the s 25 example of a term that lets one party penalise the other for termination. A better deposit clause says what the deposit pays for, such as materials ordered or a booked start date. If it also refunds what was not spent, it is much easier to defend as protecting a legitimate interest.

Residential building work has a second layer. In Victoria, the Domestic Building Contracts Act 1995 (s 11) caps a deposit at 5% of a contract price of $20,000 or more, and 10% below that. In NSW, the NSW Government’s contract guide says you cannot request more than 10% on a home building contract over $5,000 including GST. Those caps apply regardless of whether the term is fair; check your own state’s rule before you set the percentage.

A flat cancellation fee

Take a fee of 25% if the customer cancels, with no matching right for them if you cancel. That is the kind of term the ACCC has named as a 2026–27 priority. The Treasury review records complaints about early termination fees “being almost the full value of the contract”. A fee tied to costs you can show holds up better than a round percentage.

To make that concrete, take an illustration rather than a real job. Say a plumber quotes a hot water system replacement, orders the unit, and the customer cancels two days before the install. A clause that recovers the cost of a unit that cannot be returned, plus a set fee for the booked half-day, points to a real loss. A clause that keeps 30% of the whole job does not.

“Prices may change without notice”

A term letting you raise the price after acceptance, without letting the customer walk away, is very close to one of the s 25 examples. You may need room for material price rises on a long job. If so, say which prices can move and how the change is worked out, and let the customer cancel if they do not accept it.

Automatic renewal on a maintenance or service plan

Annual pest treatments, air-conditioning services and gutter plans often roll over automatically. Take a renewal term that only you can stop, or that is hard for the customer to find. It falls within the s 25 example about one party deciding whether the contract renews. The ACCC has also named automatic renewals as a 2026–27 priority. It matters for older customers too. The rules apply to a contract made before 9 November 2023 from the day it is renewed or varied, so last year’s plan comes under them at its next renewal.

“No responsibility for any damage or loss”

A sweeping exclusion is exposed twice. It can fail the fairness test as a term limiting your liability. Separately, under s 64 a term is void to the extent it tries to exclude the consumer guarantees. A narrower term that deals with specific risks the customer can understand, such as existing corroded pipes, is a different proposition.

“We may vary these terms at any time”

A right to change the terms of a contract already agreed is another s 25 example. Posting new terms on your website does not make a one-sided variation fair. If the terms need updating, update them for new quotes.

A late payment fee

Charging for late payment is not unfair in itself. A fee far above the real cost of waiting for the money looks more like a penalty. So does one hidden in the fine print. Keep the figure proportionate, put it on the quote and the invoice, and say when it starts.

A clearly quoted call-out fee or minimum charge is a different case. If the customer sees it before agreeing, it is part of the upfront price, which the fairness test does not reach. That is our reading of s 26 rather than something the ACCC has said about trades; what makes it hold is showing the figure up front.

What an unfair term can cost now

An unfair term is void, and the rest of the contract carries on without it if it can. Since November 2023 a penalty can apply on top. The maximums for each contravention are:

• A company: the greatest of $100 million, three times the benefit obtained, or 30% of adjusted turnover during the breach period. The $100 million figure applies to conduct from 28 March 2026, when the Doubling Penalties for ACCC Enforcement Act took effect; earlier conduct stays under the old $50 million cap.
• A sole trader or other individual: $2.5 million.

Those are ceilings a court works down from, not typical fines. The practical exposure for most trade businesses is more ordinary. A customer’s lawyer or a fair trading officer points to the clause, and the clause fails. On a regulator’s application, the court can also stop you using similar terms with other customers (s 243B).

What changes for maintenance plans in July 2027

A separate law is on the way. The Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 received assent on 6 July 2026 and commences on 1 July 2027. Alongside a general ban on unfair trading practices towards consumers, it brings rules for subscription contracts. The business has to disclose key terms before sign-up. It also has to give an exit that is easy to find and straightforward to use, online where the customer signed up online.

A recurring pest control, servicing or gutter plan that renews by itself looks likely to fall within those subscription rules. That is our reading of the Act; the regulations that fill in the detail have not been made. If you run plans like that, reviewing your renewal clause now is also the first step towards 2027.

Before the next quote goes out

Read your terms as a customer would, one clause at a time, and ask the question the law asks: what legitimate interest does this protect, and could I prove it? Tie deposits and cancellation fees to real costs. Give the customer a way out wherever you keep one for yourself. Put the important terms where they will be read, in words a homeowner understands, the same way a clear written estimate that explains what is included wins more work than a bare number. If the answer to a clause is “because it was in the template”, that is the one to rewrite. A lawyer’s hour on a document you send hundreds of times is money well spent.