Understanding Unfair

Contract Terms
• W h a t i s U n f a i r C o n t r a c t Te r m s ?
• What makes a contract term unfair?
• E x a m p l e s o f U n f a i r C o n t r a c t Te r m s
• Mitolo Group Pty Ltd Case (2019)
 What is Unfair Contract Terms?

Unfair Contract Terms refers to those terms that create

benefit for the first party at the disadvantage of the second party,
especially where the second party has little to no opportunity to
negotiate said terms.

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 What terms makes a contract unfair?
A contract term is considered unfair if – 
 Terms enhances the imbalance between parties rights
and obligation
 Terms are not reasonably necessary to protect interest
of the parties
 Terms causes financial or non-financial detriment to the
consumer

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 Examples of Unfair Contract Terms
 Allows one party to avoid or limit performance of the contract, but not the
other

 Allows one party to terminate the contract but not the other, but not the other

 Allows one party to be exempt from penalties for breach or termination of the
contract, but not the other

 Allows one party to limit the other parties right to seek legal action

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 Mitolo Group Pty Ltd
Case (2019)
Mitolo Group Pty Ltd is a wholesaler of potatoes in Australia
They set unfair contract terms with 19 different potato
farmers. The unfair terms were:
• Only Mitolo could dictate the bargaining price of the
potatoes from the farmers 
• Declare potatoes as "wastage" without any proper
inspection from the potato farmers
• Potato farmers are restricted to sell to other potential
buyers
Mitolo was fined $240,000 under the Horticulture Code 

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