The Australian Competition and Consumer Commission (ACCC) has announced that one of its key enforcement priorities for 2025–26 is ensuring businesses comply with the unfair contract terms (UCT) laws under the Australian Consumer Law.

This renewed focus should prompt all businesses, especially those using standard form contracts with consumers or small businesses, to review and update their agreements without delay.

Why This Matters

The ACCC will be scrutinising common contractual pitfalls, particularly those involving:

• Automatic renewal (rollover) clauses
• Excessive early termination fees
• Non-cancellation clauses
• Lack of clear notice before rollover occurs

Under the current law, a court can now impose significant penalties for including unfair terms in standard form contracts with small businesses or consumers. This represents a major shift from the previous position, where the only consequence was that the term would be void.

Common Clauses Under the Microscope

One of the biggest risk areas is automatic rollover or renewal clauses, those sneaky terms that extend contracts by default if no action is taken.

These may be considered unfair where:

• The renewal term is longer or onerous
• The clause is buried in fine print or not disclosed clearly before signing
• There’s no clear notice period before the rollover
• Cancellation post-renewal attracts disproportionate exit fees

In 2022, the ACCC investigated a company where contracts automatically renewed for up to six years without prior customer notice. The company was required to revise its terms, shortening the renewal period and ensuring customers were notified.

Similarly, Fujifilm Business Innovation Australia faced Federal Court action for renewal clauses that locked in customers unless they cancelled by a precise deadline. Another reminder that even large corporates are not immune from enforcement.

What Should Businesses do Now?

If your business uses standard form contracts – particularly in the technology, services, leasing, or franchise sectors – it’s time to proactively review and revise your terms.

Consider:

• Do your contracts automatically renew without sufficient notice?
• Are early exit fees excessive or one-sided?
• Are cancellation processes clear, fair and accessible?
• Would a court say your terms create a significant imbalance in rights?

Get Ahead of the ACCC

At FCW Lawyers, we assist businesses of all sizes to bring their contracts into line with the latest unfair contract terms laws. A well-drafted contract doesn’t just protect you it builds trust with customers and business partners.

Now is the time to act before the ACCC does.

If you’d like a health check of your existing contracts or template agreements, please get in touch with Vincent Caruso and Flora Alasaly.

Email: vincent.caruso@fcwlawyers.com.au or flora.alasaly@fcwlawyers.com.au

Phone: 03 9063 3606 or 1300 495 054