Your Business Contract Might Not Protect You Anymore: Unfair Contract Terms in 2026

Many Queensland business owners assume that if a contract is signed, it is enforceable.

That assumption is increasingly dangerous.

Recent changes to Australia’s unfair contract terms (UCT) regime mean that a wide range of standard business contracts can now be declared void and unenforceable, even after they have been signed.

For many businesses, this creates a hidden legal risk that only becomes obvious when a dispute arises.

What Has Changed?

Unfair contract terms laws have been significantly expanded to cover a much broader range of business-to-business contracts, particularly those involving small businesses.

The key shift is that courts now have greater power to:

• Declare contract terms unfair
• Strike out those terms entirely
• Prevent businesses from relying on them in disputes

In practice, this means parts of your contract may not hold up when you need them most.

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What Is an “Unfair” Contract Term?

A term may be considered unfair if it:

• Creates a significant imbalance in the rights of the parties
• Is not reasonably necessary to protect legitimate business interests
• Would cause financial or operational harm if enforced

Common examples include clauses that:

• Allow one party to change pricing or terms unilaterally
• Impose disproportionate penalties for breach
• Limit liability unfairly in favour of one party
• Allow termination rights that are one-sided or unclear

Why This Matters for Queensland Businesses

The biggest risk is not obvious contracts, it is standard templates that have been used for years without review.

Many businesses are still relying on:

• Old service agreements
• Supplier contracts drafted before the law changed
• Industry “standard terms” downloaded online
• Contracts reused across multiple clients without legal review

These documents may now contain clauses that are unenforceable under the updated regime.

The Hidden Risk: You Only Find Out in a Dispute

The unfair contract terms regime is not about preventing contracts from being signed.

It becomes relevant when a dispute arises.

This means:

• You may believe you are protected
• Your contract may appear valid
• But key clauses may not be enforceable in court

This creates significant uncertainty in commercial disputes.

Real-World Impact on Businesses

If a contract term is found to be unfair, the consequences may include:

• Loss of contractual leverage in disputes
• Inability to enforce penalty clauses
• Reduced ability to recover losses
• Increased litigation risk and legal costs
• Greater negotiating power shifting to the other party

For businesses operating on tight margins, this can be commercially significant.

Who Is Most at Risk?

Queensland businesses most exposed include:

• Small to medium enterprises
• Service-based businesses using template contracts
• Contractors and subcontractors
• Businesses relying on long-term supplier agreements
• Franchise and distribution arrangements

What Businesses Should Do Now

To reduce exposure to unfair contract term risks, businesses should:

• Review all standard form contracts
• Update templates to reflect current law
• Avoid one-sided penalty or termination clauses
• Ensure liability clauses are commercially reasonable
• Obtain legal review before reusing older agreements

A contract review is often significantly cheaper than defending a dispute where key clauses cannot be enforced.

Get Ahead with Expert Legal Guidance

Trust Aylward Game Solicitors to Navigate Your Legal Challenges

Schedule Your Appointment Now

Call Us (1800) 217 217

The Bottom Line

The unfair contract terms regime is no longer a theoretical compliance issue.

It is now a practical commercial risk affecting everyday business contracts across Queensland.

Businesses that rely on outdated or unreviewed agreements may find that their contracts do not provide the protection they expect when disputes arise.

If your business uses standard contracts or has not reviewed its terms in recent years, now is the time to obtain legal advice.

For advice on commercial contracts, risk review, or dispute prevention, contact Aylward Game Solicitors.