On 12 November 2016, the unfair contract terms laws began applying to small business contracts. A court may now declare void 'unfair' terms in standard form, small business contracts for the supply of goods or services, or regarding an interest in land. The test for what constitutes an 'unfair' term mirrors the current test applied in relation to consumer contracts. That is, a court may declare a term to be 'unfair' if it: • would cause a significant imbalance in the parties' rights and obligations arising under the contract; • would cause detriment to a party if relied upon; and • is not reasonably necessary to protect the advantaged party's legitimate business interests. In determining whether a term is unfair and therefore void, courts will consider the transparency of the term and the contract as a whole. A 'small business contract' is one in which at least one of the parties is a business employing fewer than 20 people, and the upfront price payable under the contract does not exceed AU $300,000 (or AU $1,000,000 if the contract term is longer than 12 months). The term 'standard form contract' is not defined in the legislation, and courts may look to whether or not the contract was subject to negotiation between the parties, whether it was offered on a 'take it or leave it' basis, and the relative bargaining power of the parties. If you have not already done so, you must review your customer contracts to ensure they comply with the new unfair contract terms regime. Importantly, this legislation will apply to contracts entered into or renewed (including automatic renewals), and to variations of contracts, on or after 12 November 2016. Please contact us if you require further advice on reviewing and amending your current standard form small business contracts. This note follows our earlier update on changes to the unfair contract terms regime in the May 2015 edition of LegalBytes, and attaches our detailed client alert from October 2015. For more information, please contact Anne-Marie Allgrove,Toby Patten or Matthew Dempsey or Grace Loukides.