Review a standard-form financial product or credit contract for unfair terms
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- From the contract, list each term that lets one party vary the price or the terms, limit liability, impose a default or exit fee, or renew automatically, and quote it. Do not mark a term unfair and do not rewrite it.
- What the lawyer must review
- The lawyer decides whether the regime applies and whether a term is unfair. Information Sheet 211 says unfair terms in standard form contracts for financial products and services and insurance are illegal under section 12BF of the ASIC Act. For a small business contract the sheet requires that at least one party employs fewer than 100 people or had turnover for the last income year of less than $10 million, and that the upfront price payable for a financial product or service does not exceed $5 million. The sheet says individual consumers are also protected and points to Information Sheet 210, which was not opened. A standard form contract is one prepared by one party and offered largely on a take-it-or-leave-it basis, and the sheet says that if a small business alleges it is a standard form, it is presumed to be one unless proved otherwise. The sheet sets out three matters for an unfair term: a significant imbalance in the parties' rights and obligations, the term not being reasonably necessary to protect the legitimate interests of the party who would benefit, and detriment to the small business if the term were applied or relied on. The lawyer applies the conjunction in the current section, not the sheet's punctuation. A court must consider transparency. If a court finds a term unfair, the sheet says the term is void and the contract continues if it can operate without that term. The sheet itself says it does not reflect the civil penalty regime introduced in October 2023. The lawyer checks the current penalty and voidness provisions, including section 12BF, before advising.
- Written for / version
- US
Open a jurisdiction version of this task to see which instruments apply: US
Who does what
| Role | What they do |
|---|---|
| Assistance | From the contract, list each term that lets one party vary the price or the terms, limit liability, impose a default or exit fee, or renew automatically, and quote it. Do not mark a term unfair and do not rewrite it. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Record the employee count or the last-year turnover, and the upfront price, before treating the small-business test as met. The sheet's figures are fewer than 100 people, turnover under $10 million, and a $5 million upfront-price cap for financial products or services.
- For an individual who is not a small business, open Information Sheet 210. It was not opened for this task.
- Apply the unfairness test in the current ASIC Act. Confirm whether the three matters are cumulative. Do not rely on the information sheet's list punctuation.
- The sheet says it does not reflect the October 2023 civil penalty regime. Read the current section 12BF before describing the consequence of proposing an unfair term.
Sources
- ASIC Information Sheet 211: Unfair contract term protections for small businesses · 2026-10-22
- ASIC Act 2001 (Cth) section 12BF · 2026-10-22
These are suggested working checks. Confirm the required checking with the responsible lawyer before work starts; the checking approach does not establish permission to use AI.