The 9 November 2023 amendments to the Australian Consumer Law finally gave the unfair contract terms regime teeth. Unfair terms in standard-form small-business contracts became illegal, pecuniary penalties became attachable (up to $50 million per contravention for body corporates), and the small-business eligibility threshold expanded materially.
Two and a half years later, the reform has worked through to the operational layer.
What actually changed
Before November 2023, a term found to be unfair by a court was void. The counterparty that had relied on it was not penalised. The small business that had signed it could, in theory, resist enforcement, but the cost of litigating to do so was frequently higher than the cost of complying with the term.
After November 2023, the term is illegal. Proposing, applying, or relying on an unfair term is a contravention, with civil penalties. The incentive to use these terms in templates, which was substantial in the old regime, is materially weaker in the new one.
The eligibility threshold also changed. The small-business counterparty definition extended to any business with fewer than 100 employees or less than $10 million in turnover. That captures a much larger share of the Australian SMB universe than the previous thresholds.
Where the ACCC has been active
ACCC Chair Gina Cass-Gottlieb confirmed in February 2025 that unfair contract terms would remain a 2025-26 enforcement priority. The track record since is consistent with that signal.
Federal Court proceedings against Fujifilm Business Innovation remain the highest-profile UCT matter, with commentary ongoing through 2025. Franchise-sector matters have continued; so have actions against digital platforms and agricultural supply contracts. The ASBFEO’s 2025 annual reporting showed rising dispute volumes where one side raised UCT as a defence or counter-claim.
The clauses most commonly removed from amended templates are the expected ones:
- Unilateral variation rights held by the larger party.
- Automatic rollover clauses with long notice windows for the smaller party.
- Broad indemnities that run one way.
- Asymmetrical limitation-of-liability provisions.
The Treasury’s 2024-25 review of the Franchising Code has intersected with UCT work in the franchise sector, adding a second regulatory lens to the same underlying contract. That has compounded the pressure on franchisor templates.
Unfair contract terms remains a continuing focus. Small business, franchising, and digital platforms are priority sectors.
What small-business operators are doing
The businesses I have spoken to through 2025 and 2026 that have moved most actively on UCT fall into two groups.
The first group is small suppliers to large buyers. These are the businesses whose 2022-era contracts most often contain the problem clauses, because they were signed under take-it-or-leave-it terms. For these operators, the 2024-25 window has been an opportunity to request contract amendments at renewal, backed by the plausible threat that the existing terms may be unenforceable. The request does not always succeed, but it is being made, and buyers are increasingly willing to negotiate.
The second group is franchisees. The Franchising Code review overlaid on UCT has made the 2025-26 window the most favourable time in decades to raise contract concerns. Several franchise councils have used the combined regime as leverage for structural amendments that would not have been achievable under either regime alone.
The counterintuitive finding
One point that is not well-understood in the small-business sector is that the UCT regime binds the small business as a counterparty of a larger one, but also the small business as the drafter of its own standard terms.
A small business that sells to other small businesses, with a standard-form contract whose terms are too one-sided, is exposed under the new regime if any counterparty qualifies as a “small business” (fewer than 100 employees or under $10 million turnover). In practice, most of the counterparties a small supplier deals with will qualify.
The advice the commercial lawyers I have spoken with give most often is therefore symmetric. Review the contracts you sign as a small business. Then review the contracts your small business asks others to sign.
The second review is the one most small businesses have not done. Through 2026 it is the one the regulator is increasingly interested in.
Where this lands in 2027
The expectation from the ACCC commentary and the Treasury reform pipeline is that UCT work will continue at roughly its current intensity through 2026-27, with a gradual shift from flagship cases against large platforms to pattern-based enforcement in specific sectors. The direction of the reform is not changing. The specific clauses the regulator takes an interest in will.
For small business, the 2026 posture is clear. The contracts you signed in 2022 are worth reading again. The contracts you are drafting now are worth having reviewed. The penalties attached to getting either wrong are sized for large companies, but they apply to small ones too.