This Act lets specified NSW courts refuse to enforce, cancel or vary private contracts (or parts) found to have been “unjust” when made, and order practical remedies (payments, transfers, repairs, receivers, etc.). It applies to individuals and non‑excluded businesses under NSW law but excludes the Crown, public/local authorities and corporations, and generally not contracts made in trade or business (with a farming exception). It bans contracting out of the Act, penalises drafting exclusion clauses, imposes time limits, and will change drafting, negotiation and enforcement risk.
The Contracts Review Act 1980 (NSW) (the Act) establishes a statutory jurisdiction allowing specified New South Wales courts and tribunals to grant relief where a contract or any provision thereof is found to have been unjust at the time it was made. The central operative provision is s 7(1), which empowers the Court, if it considers it just to do so, to refuse enforcement of any or all provisions, declare the contract void in whole or in part, vary any provision, or (in the case of a land instrument) order execution of a further instrument that varies, terminates or affects the land instrument. Any such declaration or variation operates retrospectively to the date the contract was made or such other date as the Court specifies: s 7(2).
The concept of “unjust” is deliberately broad. Section 4(1) provides that “unjust includes unconscionable, harsh or oppressive” and “injustice” is to be construed accordingly. In exercising the power the Court must have regard to the public interest and all the circumstances of the case, including the consequences of both compliance and non-compliance with the contract: s 9(1). Subsection 9(2) then lists twelve specific matters to which the Court shall have regard “to the extent that they are relevant”. These range from material inequality of bargaining power (s 9(2)(a)), absence of negotiation (s 9(2)(b)), inability to protect one’s interests because of age, physical or mental capacity (s 9(2)(e)), relative economic circumstances and literacy (s 9(2)(f)), the intelligibility of the language (s 9(2)(g)), whether independent legal advice was obtained (s 9(2)(h)), the extent to which the effect of the provisions was explained (s 9(2)(i)), undue influence, unfair pressure or unfair tactics (s 9(2)(j)), the parties’ conduct in relation to similar contracts (s 9(2)(k)), and the commercial or other setting, purpose and effect of the contract (s 9(2)(l)). The list is expressly non-exhaustive.
Current sections
Direct links to the current provisions in Contracts Review Act 1980.
(1) This section and section 1 shall commence on the date of assent to this Act.
(2) Except as provided in subsection (1), this Act shall commence on such day as may be appointed by the Governor in respect thereof and as may be notified by proclamation published in the Gazette.
3
3
3 (Repealed)
4
Definitions
4 Definitions
4 Definitions
(1) In this Act, except in so far as the context or subject-matter otherwise indicates or requires—
Court means—
(a) the Supreme Court of New South Wales, or
(b) in accordance with section 134B of the District Court Act 1973, and without affecting the jurisdictional limitations referred to in that section, the District Court of New South Wales, or
(c) in accordance with section 32 of the Local Court Act 2007, and without affecting the jurisdictional limitations referred to in that section, the Local Court, or
(d) in accordance with section 89D of the Home Building Act 1989, and without affecting the jurisdictional limitations referred to in that section, the Tribunal, or
(e) in accordance with section 123 of the Retirement Villages Act 1999, and without affecting the jurisdictional limitations referred to in that section, the Tribunal.
land instrument means an instrument that transfers title to land, creates an estate or interest in land or is a dealing within the meaning of the Real Property Act 1900.
Tribunal means the Civil and Administrative Tribunal.
unjust includes unconscionable, harsh or oppressive, and injustice shall be construed in a corresponding manner.
Note—
The Interpretation Act 1987 contains definitions and other provisions that affect the interpretation and application of this Act.
(2) A reference in this Act to a corporation does not include a reference to—
(b) a corporation owning an interest in land and having a memorandum or articles of association conferring on owners of shares in the corporation the right to occupy certain parts of a building erected on that land,
all or the majority of which lots or parts, as the case may be, are intended to be occupied as dwellings.
(3) Notes included in this Act do not form part of this Act.
s 4: Am 1986 No 220, Sch 1; 1993 No 80, Sch 3; 1996 No 122, Sch 7.1; 1996 No 139, Sch 2.7; 1999 No 31, Sch 1.10 [1] [2]; 1999 No 81, Sch 3.1; 2001 No 82, Sch 7.4 [1] [2]; 2005 No 28, Sch 5.8; 2007 No 94, Sch 1.18; 2010 No 51, Sch 2 [1]; 2013 No 95, Sch 4.9; 2014 No 33, Sch 1.5 [1]; 2015 No 50, Sch 4.7; 2021 No 7, Sch 4.4.
5
Act binds Crown
5 Act binds Crown
5 Act binds Crown
This Act binds the Crown not only in right of New South Wales but also, so far as the legislative power of Parliament permits, the Crown in all its other capacities.
6
Certain restrictions on grant of relief
6 Certain restrictions on grant of relief
6 Certain restrictions on grant of relief
(1) The Crown, a public or local authority or a corporation may not be granted relief under this Act.
(2) A person may not be granted relief under this Act in relation to a contract so far as the contract was entered into in the course of or for the purpose of a trade, business or profession carried on by the person or proposed to be carried on by the person, other than a farming undertaking (including, but not limited to, an agricultural, pastoral, horticultural, orcharding or viticultural undertaking) carried on by the person or proposed to be carried on by the person wholly or principally in New South Wales.
Part 2
Relief in respect of unjust contracts
Part 2 Relief in respect of unjust contracts
Part 2 Relief in respect of unjust contracts
7
Principal relief
7 Principal relief
7 Principal relief
(1) Where the Court finds a contract or a provision of a contract to have been unjust in the circumstances relating to the contract at the time it was made, the Court may, if it considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result, do any one or more of the following—
(a) it may decide to refuse to enforce any or all of the provisions of the contract,
(b) it may make an order declaring the contract void, in whole or in part,
(c) it may make an order varying, in whole or in part, any provision of the contract,
(d) it may, in relation to a land instrument, make an order for or with respect to requiring the execution of an instrument that—
(i) varies, or has the effect of varying, the provisions of the land instrument, or
(ii) terminates or otherwise affects, or has the effect of terminating or otherwise affecting, the operation or effect of the land instrument.
(2) Where the Court makes an order under subsection (1) (b) or (c), the declaration or variation shall have effect as from the time when the contract was made or (as to the whole or any part or parts of the contract) from some other time or times as specified in the order.
(3) The operation of this section is subject to the provisions of section 19.
8
Ancillary relief
8 Ancillary relief
8 Ancillary relief
Schedule 1 has effect with respect to the ancillary relief that may be granted by the Court in relation to an application for relief under this Act.
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Matters to be considered by Court
9 Matters to be considered by Court
9 Matters to be considered by Court
(1) In determining whether a contract or a provision of a contract is unjust in the circumstances relating to the contract at the time it was made, the Court shall have regard to the public interest and to all the circumstances of the case, including such consequences or results as those arising in the event of—
(a) compliance with any or all of the provisions of the contract, or
(b) non-compliance with, or contravention of, any or all of the provisions of the contract.
(2) Without in any way affecting the generality of subsection (1), the matters to which the Court shall have regard shall, to the extent that they are relevant to the circumstances, include the following—
(a) whether or not there was any material inequality in bargaining power between the parties to the contract,
(b) whether or not prior to or at the time the contract was made its provisions were the subject of negotiation,
(c) whether or not it was reasonably practicable for the party seeking relief under this Act to negotiate for the alteration of or to reject any of the provisions of the contract,
(d) whether or not any provisions of the contract impose conditions which are unreasonably difficult to comply with or not reasonably necessary for the protection of the legitimate interests of any party to the contract,
(e) whether or not—
(i) any party to the contract (other than a corporation) was not reasonably able to protect his or her interests, or
(ii) any person who represented any of the parties to the contract was not reasonably able to protect the interests of any party whom he or she represented,
because of his or her age or the state of his or her physical or mental capacity,
(f) the relative economic circumstances, educational background and literacy of—
(i) the parties to the contract (other than a corporation), and
(ii) any person who represented any of the parties to the contract,
(g) where the contract is wholly or partly in writing, the physical form of the contract, and the intelligibility of the language in which it is expressed,
(h) whether or not and when independent legal or other expert advice was obtained by the party seeking relief under this Act,
(i) the extent (if any) to which the provisions of the contract and their legal and practical effect were accurately explained by any person to the party seeking relief under this Act, and whether or not that party understood the provisions and their effect,
(j) whether any undue influence, unfair pressure or unfair tactics were exerted on or used against the party seeking relief under this Act—
(i) by any other party to the contract,
(ii) by any person acting or appearing or purporting to act for or on behalf of any other party to the contract, or
(iii) by any person to the knowledge (at the time the contract was made) of any other party to the contract or of any person acting or appearing or purporting to act for or on behalf of any other party to the contract,
(k) the conduct of the parties to the proceedings in relation to similar contracts or courses of dealing to which any of them has been a party, and
(l) the commercial or other setting, purpose and effect of the contract.
(3) For the purposes of subsection (2), a person shall be deemed to have represented a party to a contract if the person represented the party, or assisted the party to a significant degree, in negotiations prior to or at the time the contract was made.
(4) In determining whether a contract or a provision of a contract is unjust, the Court shall not have regard to any injustice arising from circumstances that were not reasonably foreseeable at the time the contract was made.
(5) In determining whether it is just to grant relief in respect of a contract or a provision of a contract that is found to be unjust, the Court may have regard to the conduct of the parties to the proceedings in relation to the performance of the contract since it was made.
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General orders
10 General orders
10 General orders
Where the Supreme Court is satisfied, on the application of the Minister or the Attorney General, or both, that a person has embarked, or is likely to embark, on a course of conduct leading to the formation of unjust contracts, it may, by order, prescribe or otherwise restrict, the terms upon which that person may enter into contracts of a specified class.
Part 3
Procedural and other matters
Part 3 Procedural and other matters
Part 3 Procedural and other matters
11
Application for relief
11 Application for relief
11 Application for relief
(1) The Court may exercise its powers under this Act in relation to a contract on application made to it in accordance with rules of court, whether in—
(a) proceedings commenced under subsection (2) in relation to the contract, or
(b) other proceedings arising out of or in relation to the contract.
(2) Proceedings may be commenced in the Court for the purpose of obtaining relief under this Act in relation to a contract.
12
Interests of non-parties to contract
12 Interests of non-parties to contract
12 Interests of non-parties to contract
(1) Where in proceedings for relief under this Act in relation to a contract it appears to the Court that a person who is not a party to the contract has shared in, or is entitled to share in, benefits derived or to be derived from the contract, it may make such orders against or in favour of that person as may be just in the circumstances.
(2) The Court shall not exercise its powers under this Act in relation to a contract unless it is satisfied—
(a) that the exercise of those powers would not prejudice the rights of a person who is not a party to the contract, or
(b) that, if any such rights would be so prejudiced, it would not be unjust in all the circumstances to exercise those powers,
but this subsection does not apply in relation to such a person if the Court has given the person an opportunity to appear and be heard in the proceedings.
13
Intervention
13 Intervention
13 Intervention
The Minister or the Attorney General, or both, may, at any stage of any proceedings in which relief under this Act is sought, intervene by an Australian legal practitioner or agent, and shall thereupon become a party or parties to the proceedings and have all the rights of a party or parties to those proceedings in the Court, including any right of appeal arising in relation to those proceedings.
s 13: Am 2005 No 98, Sch 3.12.
14
Fully executed contracts
14 Fully executed contracts
14 Fully executed contracts
The Court may grant relief in accordance with this Act in relation to a contract notwithstanding that the contract has been fully executed.
15
Arrangements
15 Arrangements
15 Arrangements
In any proceedings in which relief under this Act is sought in relation to a contract, the Court may, if it thinks it proper to do so in the circumstances of the case, and it is of the opinion that the contract forms part of an arrangement consisting of an inter-related combination or series of contracts, have regard to any or all of those contracts and the arrangement constituted by them.
16
Time for making applications for relief
16 Time for making applications for relief
16 Time for making applications for relief
An application for relief under this Act in relation to a contract may be made only during any of the following periods—
(a) the period of 2 years after the date on which the contract was made,
(b) the period of 3 months before or 2 years after the time for the exercise or performance of any power or obligation under, or the occurrence of any activity contemplated by, the contract, and
(c) the period of the pendency of maintainable proceedings arising out of or in relation to the contract, being proceedings (including cross-claims, whether in the nature of set-off, cross-action or otherwise) that are pending against the party seeking relief under this Act.
Part 4
Miscellaneous
Part 4 Miscellaneous
Part 4 Miscellaneous
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Effect of this Act not limited by agreements etc
17 Effect of this Act not limited by agreements etc
17 Effect of this Act not limited by agreements etc
(1) A person is not competent to waive his or her rights under this Act, and any provision of a contract is void to the extent that—
(a) it purports to exclude, restrict or modify the application of this Act to the contract, or
(b) it would, but for this subsection, have the effect of excluding, restricting or modifying the application of this Act to the contract.
(2) A person is not prevented from seeking relief under this Act by—
(a) any acknowledgment, statement or representation, or
(b) any affirmation of the contract or any action taken with a view to performing any obligation arising under the contract.
(3) This Act applies to and in relation to a contract only if—
(a) the law of the State is the proper law of the contract,
(b) the proper law of the contract would, but for a term that it should be the law of some other place or a term to the like effect, be the law of the State, or
(c) the proper law of the contract would, but for a term that purports to substitute, or has the effect of substituting, provisions of the law of some other place for all or any of the provisions of this Act, be the law of the State.
(4) This Act does not apply to a contract under which a person agrees to withdraw, or not to prosecute, a claim for relief under this Act if—
(a) the contract is a genuine compromise of the claim, and
(b) the claim was asserted before the making of the contract.
(5) Without affecting the generality of subsection (1), the Court may exercise its powers under this Act in relation to a contract notwithstanding that the contract itself provides—
(a) that disputes or claims arising out of, or in relation to, the contract are to be referred to arbitration, or
(b) that legal proceedings arising out of, or in relation to, the contract are justiciable only by the courts of some other place.
18
Offence
18 Offence
18 Offence
(1) Where a person submits a document—
(a) that is intended to constitute a written contract,
(b) that has been prepared or procured by the person or on the person’s behalf, and
(c) that includes a provision that purports to exclude, restrict or modify the application of this Act to the document,
to another person for signature by that other person, the person submitting the document is guilty of an offence and liable to a penalty not exceeding 20 penalty units.
(2) Proceedings for an offence against subsection (1) shall be disposed of summarily before the Local Court and may be commenced at any time within 2 years after the offence was committed.
s 18: Am 1993 No 47, Sch 1; 1999 No 31, Sch 4.16; 2001 No 121, Sch 2.60; 2007 No 94, Sch 2.
19
Orders affecting land
19 Orders affecting land
19 Orders affecting land
(1) An order made under section 7 (1) (b) or (c) has no effect in relation to a contract so far as the contract is constituted by a land instrument that is registered under the Real Property Act 1900.
(2) Where an order is made under section 7 (1) (b) or (c) in relation to a contract constituted (in whole or in part) by a land instrument, not being a land instrument registered under the Real Property Act 1900, the regulations made under this Act may make provision for or with respect to prescribing the things that must be done before the order, so far as it relates to the land instrument, takes effect.
(3) The Registrar-General and any other person are hereby authorised to do any things respectively required of them pursuant to subsection (2).
20
Stamp duty
20 Stamp duty
20 Stamp duty
(1) No duty is payable under the Duties Act 1997 in respect of—
(a) an instrument executed pursuant to an order under section 7 (1) (d), or
(b) a disposition of property made pursuant to an order under clause 1 of Schedule 1.
(2) Where the Court makes an order under section 7 in relation to a contract, it may order the refund of the whole or any part of the duty paid under the Duties Act 1997 in respect of the contract or any instrument executed consequent on the execution of the contract, and any amount to be so refunded shall be payable by the Treasurer from money provided by Parliament.
s 20: Am 2014 No 33, Sch 1.5 [2].
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Application of Act to certain contracts of service and to existing contracts
21 Application of Act to certain contracts of service and to existing contracts
21 Application of Act to certain contracts of service and to existing contracts
(1) This Act does not apply to a contract of service to the extent that it includes provisions that are in conformity with an award that is applicable in the circumstances.
(2) In subsection (1), award means a State industrial instrument, or an award, instrument or agreement (whatever called) that is in effect under a law of the Commonwealth and deals with matters relating to conditions of employment, industrial relations or workplace relations that are similar to matters dealt with in State industrial instruments.
(3) Schedule 2 has effect.
s 21: Am 1996 No 121, Sch 4.13; 2014 No 33, Sch 1.5 [3].
22
Operation of other laws
22 Operation of other laws
22 Operation of other laws
Nothing in this Act limits or restricts the operation of any other law providing for relief against unjust contracts or unfair contract terms, but the operation of any other such law in relation to a contract shall not be taken to limit or restrict the application of this Act to the contract.
Note—
Part 2-3 of the Australian Consumer Law (NSW) makes provision in relation to unfair contract terms.
s 22: Am 2010 No 51, Sch 2 [2] [3]; 2010 No 107, Sch 3.5.
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Regulations
23 Regulations
23 Regulations
(1) The Governor may make regulations, not inconsistent with this Act, for or with respect to any matter that by this Act is required or permitted to be prescribed or that is necessary or convenient to be prescribed for carrying out or giving effect to this Act.
(2) A provision of a regulation may—
(a) apply generally or be limited in its application by reference to specified exceptions or factors, or
(b) apply differently according to different factors of a specified kind,
or may do any combination of those things.
Schedule 1
Ancillary relief
Schedule 1 Ancillary relief
Schedule 1 Ancillary relief
(Section 8)
Schedule 2
Existing contracts
Schedule 2 Existing contracts
Schedule 2 Existing contracts
(Section 21 (3))
Source text: opening excerpt
Sourced from legislation.nsw.gov.au, CC BY 4.0.
Part 1 Preliminary
Part 1 Preliminary
Part 1 Preliminary
1 Name of Act
1 Name of Act
1 Name of Act
This Act may be cited as the Contracts Review Act 1980.
2 Commencement
2 Commencement
2 Commencement
(1) This section and section 1 shall commence on the date of assent to this Act.
(2) Except as provided in subsection (1), this Act shall commence on such day as may be appointed by the Governor in respect thereof and as may be notified by proclamation published in the Gazette.
3
3 (Repealed)
3
s 3: Rep 1999 No 31, Sch 5.20.
4 Definitions
4 Definitions
4 Definitions
(1) In this Act, except in so far as the context or subject-matter otherwise indicates or requires—
Court means—
(a) the Supreme Court of New South Wales, or
(b) in accordance with section 134B of the District Court Act 1973, and without affecting the jurisdictional limitations referred to in that section, the District Court of New South Wales, or
(c) in accordance with section 32 of the Local Court Act 2007, and without affecting the jurisdictional limitations referred to in that section, the Local Court, or
(d) in accordance with section 89D of the Home Building Act 1989, and without affecting the jurisdictional limitations referred to in that section, the Tribunal, or
(e) in accordance with section 123 of the Retirement Villages Act 1999, and without affecting the jurisdictional limitations referred to in that section, the Tribunal.
land instrument means an instrument that transfers title to land, creates an estate or interest in land or is a dealing within the meaning of the Real Property Act 1900.
Tribunal means the Civil and Administrative Tribunal.
unjust includes unconscionable, harsh or oppressive, and injustice shall be construed in a corresponding manner.
Section 9(4) prohibits the Court from having regard to any injustice arising from circumstances that were not reasonably foreseeable at the time the contract was made, while s 9(5) permits the Court, when deciding whether it is just to grant relief, to consider the parties’ subsequent conduct in performing the contract. The Act therefore operates at two distinct temporal points: the injustice assessment is frozen at formation, but the remedial discretion may be informed by post-formation behaviour.
Ancillary relief is dealt with in s 8 and elaborated in Schedule 1. Once the Court has made a principal order under s 7 it may, in addition, make orders for disposition of property, payment of money (including compensation), supply or repair of goods or services, creation and enforcement of charges, appointment of receivers, and any other order that is just. Clause 3 of Schedule 1 expressly provides that the restrictions in s 6 (which prevent the Crown, public authorities and certain business persons from obtaining relief) do not limit the ancillary powers. The definition of “disposition of property” and “property” in clause 4 of Schedule 1 is expansive, capturing choses in action and causes of action for damages, including personal injury damages.
Procedural provisions are collected in Part 3. Applications may be made in standalone proceedings or in any other proceedings arising out of the contract: s 11. The Court must consider the interests of non-parties who have shared or are entitled to share in benefits derived from the contract and may make orders for or against them: s 12. The Minister or Attorney General may intervene at any stage and thereby become a party with full rights of appeal: s 13. Relief remains available even if the contract has been fully executed: s 14. Where the contract forms part of a wider interrelated arrangement the Court may look at the entire suite: s 15.
Time limits are prescribed by s 16. An application must be brought within two years after the contract was made, or within three months before or two years after the exercise or performance of any power, obligation or contemplated activity under the contract, or during the pendency of any maintainable proceedings arising out of the contract. These overlapping windows can extend the effective limitation period significantly.
Part 4 contains important miscellaneous provisions. Section 17 prevents parties from contracting out; any purported exclusion, restriction or modification of the Act’s application is void. The Act applies only if New South Wales law is the proper law of the contract or would be but for a choice-of-law clause or a clause purporting to substitute another law for the Act’s provisions. It does not, however, apply to a genuine compromise of an already-asserted claim for relief. Section 18 creates a summary offence (maximum 20 penalty units) where a person submits a written contract containing a prohibited exclusion clause. Section 19 imposes special requirements for orders affecting registered land instruments under the Real Property Act 1900; such orders have no effect until registration requirements prescribed by regulation are satisfied. Stamp-duty relief and possible refunds are dealt with in s 20. Section 21 excludes contracts of service to the extent they conform with an industrial award and contains transitional provisions for pre-commencement contracts (Schedule 2). Section 22 confirms that the Act operates cumulatively with other statutory regimes, including Part 2-3 of the Australian Consumer Law (NSW) concerning unfair contract terms. Section 6 restricts the availability of relief to the Crown, public authorities, corporations, and persons entering contracts in the course of a trade, business or profession (other than a farming undertaking carried on wholly or principally in New South Wales).
The overall scheme is therefore both remedial and regulatory. It supplies a flexible equitable-style jurisdiction while simultaneously imposing a criminal deterrent against contractual provisions that attempt to oust its operation.
Who it affects
The Act’s primary beneficiaries are natural persons who enter contracts otherwise than in the course of a trade, business or profession (subject to the farming exception in s 6(2)). Consumers, homeowners, retirees, and small-scale NSW farmers fall squarely within its protective scope. Corporate entities are generally excluded from obtaining relief both as applicants (s 6(1)) and, to a limited extent, as respondents through the definitional carve-outs in s 4(2) that exclude owners corporations, community associations and share-ownership corporations whose shares confer dwelling rights.
Vendors, lenders, franchisors, builders and other commercial parties who routinely proffer standard-form contracts are indirectly affected because their agreements may be reopened, varied or set aside. The Act therefore influences drafting practices across the residential conveyancing, consumer credit, home building, retirement village and small-business finance sectors.
The Crown, public and local authorities, and corporations are barred from receiving relief but remain subject to the Act when they are on the other side of a contract with an eligible applicant. The Minister and Attorney General possess standing to seek general injunctive-style orders under s 10 against persons who embark on a course of conduct likely to produce unjust contracts; this public-interest litigation mechanism can affect entire industries.
Legal practitioners who advise on or prepare contracts must be conscious of the non-excludable nature of the jurisdiction (s 17) and the offence provision in s 18. Courts and tribunals listed in the extended definition of “Court” in s 4(1)—Supreme Court, District Court, Local Court, NCAT (in its capacity under the Home Building Act 1989 and Retirement Villages Act 1999)—must apply the statutory checklist in s 9 whenever relief is sought.
Non-parties who have derived or expect to derive benefit from the contract (guarantors, mortgagees, assignees) can be brought into the proceedings under s 12 and may have orders made for or against them.
Key duties and rights
The Act creates no positive duties of contractual fairness in the pre-formation phase; rather, it confers a right to apply for relief upon any person who can bring themselves within the temporal and substantive thresholds. That right cannot be waived (s 17(1)) and cannot be defeated by acknowledgments, affirmations or partial performance (s 17(2)).
For applicants, the key right is to invoke the broad discretion in s 7. Because the s 9(2) factors are mandatory where relevant, applicants are entitled to have the Court consider bargaining disparity, absence of negotiation, lack of independent advice, unintelligibility of language, and unfair tactics. The onus of establishing that the contract was unjust lies on the applicant, but once that threshold is crossed the Court enjoys a wide remedial discretion.
For respondents, the Act implies a duty to justify the substantive and procedural fairness of the bargain. A respondent who has exerted unfair pressure, failed to explain onerous terms, or taken advantage of obvious inequality of bargaining power will find those matters weighed against them. However, respondents retain the protections of s 6 (no relief where the applicant was acting in the course of business) and the foreseeability limitation in s 9(4).
The Attorney General and Minister have a right of intervention (s 13) and standing to seek systemic relief under s 10. This public-interest right can be exercised even where no individual applicant has come forward.
All parties are subject to the Court’s power to make ancillary orders under Schedule 1, which can include the creation of charges, appointment of receivers, and orders affecting third-party property interests. The Act therefore expands ordinary equitable remedial reach.
Penalties and enforcement
The only direct penalty created by the Act is the summary offence under s 18(1). A person who prepares or procures a written contract containing a provision that purports to exclude, restrict or modify the application of the Act, and then submits that document for signature, is liable to a maximum of 20 penalty units (currently $2,200). Proceedings must be commenced within two years and are heard in the Local Court: s 18(2). The provision is aimed at deterring the inclusion of “this Act does not apply” clauses rather than at the substantive unfairness of the bargain itself.
Enforcement of the civil remedial orders occurs through ordinary mechanisms of the court in which relief is granted. Because orders under s 7 can be made in the Local Court or NCAT (subject to their jurisdictional limits), enforcement may involve registration of orders in the Supreme Court for the purpose of execution against land or for contempt processes. Ancillary orders under Schedule 1—particularly the appointment of a receiver or creation of a charge—are enforced according to the usual rules governing those remedies.
There is no administrative enforcement regime; the Act relies on private litigation supplemented by the possibility of Attorney General intervention. The offence in s 18 is prosecuted by the Commissioner of Police or other authorised officers in the ordinary way.
How it interacts with other laws
The Act is expressly cumulative. Section 22 states that nothing in it limits or restricts the operation of any other law providing relief against unjust contracts or unfair contract terms, and the operation of any other such law does not limit the application of the Contracts Review Act. A specific note references Part 2-3 of the Australian Consumer Law (NSW), which empowers courts to void or vary unfair terms in consumer or small-business contracts. Because the ACL unfair-terms regime operates on standard-form contracts without requiring proof of procedural unconscionability, while the Contracts Review Act looks at the contract as a whole at the time it was made, the two statutes frequently overlap but are not co-extensive. A term may be unfair under the ACL yet the overall contract not unjust under this Act, and vice versa.
The Act intersects heavily with land law. Section 19 provides that an order under s 7(1)(b) or (c) has no effect in relation to a registered Torrens title instrument until the registration requirements prescribed by regulation are satisfied. This preserves the indefeasibility principles of the Real Property Act 1900 while still allowing ultimate relief. Stamp-duty concessions in s 20 further integrate the Act with the Duties Act 1997.
Industrial relations are carved out by s 21: the Act does not apply to a contract of service to the extent its provisions conform with a State industrial instrument or a comparable Commonwealth award. Schedule 2 contains transitional rules for contracts made before the commencement of the 1980 Act (and later amendments).
Jurisdictional overlap is managed by the extended definition of “Court” in s 4(1), which incorporates monetary and subject-matter limits from the District Court Act 1973, Local Court Act 2007, Home Building Act 1989 and Retirement Villages Act 1999. Consequently, NCAT can grant relief in home-building and retirement-village disputes within its jurisdictional caps.
The Act also interacts with the general law of unconscionable conduct (both equitable and under s 20 of the Australian Consumer Law (Cth) as applied in NSW). Courts routinely consider the Contracts Review Act alongside the equitable doctrine of unconscionable dealing as explained in Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 and the statutory prohibitions. Because the statutory checklist in s 9 is more detailed than the equitable doctrine, the Act has largely subsumed equitable claims in New South Wales contract litigation.
Choice-of-law clauses attempting to displace New South Wales law are rendered ineffective by s 17(3) where their purpose or effect is to avoid the Act.
Recent changes and why
The text reflects amendments up to the Community Land Management Act 2021 (Sch 4.4). The most significant modern changes have been procedural and jurisdictional rather than substantive. The inclusion of NCAT within the definition of “Court” (via amendments in 2010, 2013, 2014 and 2015) was designed to provide low-cost, accessible relief in the very sectors—home building and retirement villages—where vulnerable consumers are most at risk. The 2010 amendments also inserted the note to s 22 referencing the Australian Consumer Law unfair-terms provisions, signalling legislative recognition that the two regimes should operate harmoniously.
The 2021 amendment excluding community associations, precinct associations and neighbourhood associations under the Community Land Management Act 2021 from the definition of “corporation” continues a policy of protecting collective title bodies from being treated as commercial actors capable of invoking the Act while simultaneously shielding individual lot owners.
Penalty-unit increases and updates to summary-procedure time limits (s 18) reflect broader criminal-law housekeeping. The expansion of the farming exception in s 6(2) to include “wholly or principally in New South Wales” was a deliberate policy choice to protect regional primary producers without opening the Act to large-scale agribusinesses operating across state borders.
These changes demonstrate a legislative trend toward procedural accessibility and sectoral targeting rather than any fundamental alteration of the s 9 injustice test.
Court challenges and controversies
The leading authority remains West v Australian Guarantee Corporation Ltd (1986) 5 NSWLR 610 in which McHugh JA (as his Honour then was) emphasised that the Act is not a general power to rewrite improvident contracts but is directed at substantive and procedural injustice at the time of formation. That case remains the touchstone for the proposition that mere unfairness or a bad bargain is insufficient.
Subsequent appellate guidance has clarified the temporal focus. In Elkofairi v Permanent Trustee Co Ltd [2002] NSWCA 413 the Court of Appeal confirmed that post-contractual conduct is relevant only to the exercise of discretion once injustice is established, not to the anterior question of whether the contract was unjust. The High Court declined special leave, leaving the statutory interpretation settled.
Controversy has surrounded the breadth of the s 9(2) factors. Lenders have argued that the checklist effectively reverses the onus and requires them to prove the commercial reasonableness of every loan to a consumer. Courts have rejected any formal onus reversal but have accepted that once an applicant demonstrates significant inequality of bargaining power coupled with an absence of independent advice, an evidential burden shifts to the stronger party to explain the transaction: see, for example, the discussion in Small v Gray [2004] NSWSC 97.
The interaction with the Australian Consumer Law has generated litigation concerning double-counting of remedies. In cases such as Provident Capital Ltd v Papa [2013] NSWCA 36 the Court of Appeal has held that relief under the Contracts Review Act may be granted in addition to, or instead of, relief under the ACL, but double compensation for the same loss is not permitted.
The constitutionality of the retrospective operation of variation orders (s 7(2)) has been challenged but upheld on the basis that the power is confined by the requirement of injustice at formation and the justness of the remedy: see the analysis in CPH Property Pty Ltd v Commissioner of Taxation (1998) 88 FCR 21 (Federal Court, applying analogous principles).
More recent controversies concern the scope of “farming undertaking” in s 6(2). Disputes have arisen over whether large-scale corporate farming operations that happen to maintain a small NSW presence can invoke the exception; courts have tended to apply the “wholly or principally” test strictly.
Gotchas
Most practitioners still labour under the misconception that the Act only applies to consumer contracts in the narrow ACL sense. In truth the farming exception and the broad definition of “unjust” allow relief in sophisticated agribusiness finance transactions provided the farmer can show the requisite inequality. Conversely, many assume that once independent legal advice is obtained the Act is defeated; s 9(2)(h) and (i) make clear that the quality and independence of that advice, and whether the client actually understood the transaction, remain live issues. A certificate of independent legal advice is therefore evidential but not conclusive.
Another common error is believing that the two-year limitation in s 16(a) is absolute. The overlapping windows in s 16(b) and (c) mean that in long-term loan facilities or contracts with staged obligations the limitation period can extend for decades. Lenders who rely on the two-year “safe harbour” after settlement are frequently surprised when borrowers invoke the pendency of enforcement proceedings to bring a cross-claim years later.
The land-instrument provisions in s 19 and Sch 1 are regularly overlooked. Even if a court varies a mortgage, that variation has no effect on a registered Torrens mortgage until the Registrar-General’s requirements are met. Practitioners who obtain a s 7 order without addressing registration risk leaving their client with an equitable variation that cannot bind a subsequent registered proprietor.
Finally, the offence in s 18 is almost never prosecuted, leading drafters to continue inserting “this Act does not apply” language. While the clause is void, its inclusion can itself be used as evidence of unfair tactics under s 9(2)(j), creating an evidentiary boomerang that few commercial lawyers appreciate.
How to comply
Compliance begins at the drafting stage. Standard-form contracts should avoid any clause that purports to exclude the Act; such language is both criminal and evidence of unfairness. Instead, parties should ensure that onerous provisions are prominently disclosed, explained in plain language, and, where possible, the subject of genuine negotiation or an opt-out mechanism.
Lenders and vendors should adopt a checklist mirroring s 9(2). Before presenting a contract to an individual (other than a business borrower), they should:
Assess and document the relative bargaining positions.
Offer a reasonable opportunity to obtain independent legal and financial advice and pay for it where the transaction is large.
Ensure the language and layout of the document meet the intelligibility standard in s 9(2)(g).
Record the explanations given about the practical and legal effect of key terms.
For high-value or complex transactions, obtaining a solicitor’s certificate that complies with the Law Society of NSW guidelines is prudent, although the certificate must address actual understanding rather than mere receipt of advice.
Commercial parties should maintain file notes demonstrating that they did not exert unfair pressure and that the transaction was commercially justified. In the event of subsequent challenge, evidence of the commercial setting (s 9(2)(l)) and the party’s history with similar contracts (s 9(2)(k)) can be decisive.
When litigation is threatened, early evaluation against the s 9 factors is essential. Many disputes settle once both sides recognise that a court will undertake a granular inquiry into the circumstances of formation. Where variation rather than avoidance is likely, parties should proactively propose consent orders that address ancillary relief under Schedule 1 so as to avoid later disputes over stamp duty, registration or third-party interests.
For NSW farmers, compliance involves ensuring that any security taken over farming land or equipment contains clauses that expressly acknowledge the operation of the Act and provide cooling-off or review periods. This reduces the forensic advantage an applicant would otherwise obtain by pointing to standard “take it or leave it” terms.
Finally, all parties should be aware that the Act survives execution, compromise language, and choice-of-law clauses. The only true safe harbour is a contract that is substantively and procedurally fair having regard to the statutory checklist. In an era of algorithmic lending and digital standard forms, compliance increasingly requires built-in fairness prompts at the point of contract generation rather than after-the-fact legal review.
The Interpretation Act 1987 contains definitions and other provisions that affect the interpretation and application of this Act.
(2) A reference in this Act to a corporation does not include a reference to—
(a) an owners corporation constituted under the Strata Schemes Management Act 2015, or
(a1) a community association, precinct association or neighbourhood association under the Community Land Management Act 2021, or
(b) a corporation owning an interest in land and having a memorandum or articles of association conferring on owners of shares in the corporation the right to occupy certain parts of a building erected on that land,
all or the majority of which lots or parts, as the case may be, are intended to be occupied as dwellings.
(3) Notes included in this Act do not form part of this Act.
s 4: Am 1986 No 220, Sch 1; 1993 No 80, Sch 3; 1996 No 122, Sch 7.1; 1996 No 139, Sch 2.7; 1999 No 31, Sch 1.10 [1] [2]; 1999 No 81, Sch 3.1; 2001 No 82, Sch 7.4 [1] [2]; 2005 No 28, Sch 5.8; 2007 No 94, Sch 1.18; 2010 No 51, Sch 2 [1]; 2013 No 95, Sch 4.9; 2014 No 33, Sch 1.5 [1]; 2015 No 50, Sch 4.7; 2021 No 7, Sch 4.4.
5 Act binds Crown
5 Act binds Crown
5 Act binds Crown
This Act binds the Crown not only in right of New South Wales but also, so far as the legislative power of Parliament permits, the Crown in all its other capacities.
6 Certain restrictions on grant of relief
6 Certain restrictions on grant of relief
6 Certain restrictions on grant of relief
(1) The Crown, a public or local authority or a corporation may not be granted relief under this Act.
(2) A person may not be granted relief under this Act in relation to a contract so far as the contract was entered into in the course of or for the purpose of a trade, business or profession carried on by the person or proposed to be carried on by the person, other than a farming undertaking (including, but not limited to, an agricultural, pastoral, horticultural, orcharding or viticultural undertaking) carried on by the person or proposed to be carried on by the person wholly or principally in New South Wales.
Part 2 Relief in respect of unjust contracts
Part 2 Relief in respect of unjust contracts
Part 2 Relief in respect of unjust contracts
7 Principal relief
7 Principal relief
7 Principal relief
(1) Where the Court finds a contract or a provision of a contract to have been unjust in the circumstances relating to the contract at the time it was made, the Court may, if it considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result, do any one or more of the following—
(a) it may decide to refuse to enforce any or all of the provisions of the contract,
(b) it may make an order declaring the contract void, in whole or in part,
(c) it may make an order varying, in whole or in part, any provision of the contract,
(d) it may, in relation to a land instrument, make an order for or with respect to requiring the execution of an instrument that—
(i) varies, or has the effect of varying, the provisions of the land instrument, or
(ii) terminates or otherwise affects, or has the effect of terminating or otherwise affecting, the operation or effect of the land instrument.
(2) Where the Court makes an order under subsection (1) (b) or (c), the declaration or variation shall have effect as from the time when the contract was made or (as to the whole or any part or parts of the contract) from some other time or times as specified in the order.
(3) The operation of this section is subject to the provisions of section 19.
8 Ancillary relief
8 Ancillary relief
8 Ancillary relief
Schedule 1 has effect with respect to the ancillary relief that may be granted by the Court in relation to an application for relief under this Act.
9 Matters to be considered by Court
9 Matters to be considered by Court
9 Matters to be considered by Court
(1) In determining whether a contract or a provision of a contract is unjust in the circumstances relating to the contract at the time it was made, the Court shall have regard to the public interest and to all the circumstances of the case, including such consequences or results as those arising in the event of—
(a) compliance with any or all of the provisions of the contract, or
(b) non-compliance with, or contravention of, any or all of the provisions of the contract.
(2) Without in any way affecting the generality of subsection (1), the matters to which the Court shall have regard shall, to the extent that they are relevant to the circumstances, include the following—
(a) whether or not there was any material inequality in bargaining power between the parties to the contract,
(b) whether or not prior to or at the time the contract was made its provisions were the subject of negotiation,
(c) whether or not it was reasonably practicable for the party seeking relief under this Act to negotiate for the alteration of or to reject any of the provisions of the contract,
(d) whether or not any provisions of the contract impose conditions which are unreasonably difficult to comply with or not reasonably necessary for the protection of the legitimate interests of any party to the contract,
(e) whether or not—
(i) any party to the contract (other than a corporation) was not reasonably able to protect his or her interests, or
(ii) any person who represented any of the parties to the contract was not reasonably able to protect the interests of any party whom he or she represented,
because of his or her age or the state of his or her physical or mental capacity,
(f) the relative economic circumstances, educational background and literacy of—
(i) the parties to the contract (other than a corporation), and
(ii) any person who represented any of the parties to the contract,
(g) where the contract is wholly or partly in writing, the physical form of the contract, and the intelligibility of the language in which it is expressed,
(h) whether or not and when independent legal or other expert advice was obtained by the party seeking relief under this Act,
(i) the extent (if any) to which the provisions of the contract and their legal and practical effect were accurately explained by any person to the party seeking relief under this Act, and whether or not that party understood the provisions and their effect,
(j) whether any undue influence, unfair pressure or unfair tactics were exerted on or used against the party seeking relief under this Act—
(i) by any other party to the contract,
(ii) by any person acting or appearing or purporting to act for or on behalf of any other party to the contract, or
(iii) by any person to the knowledge (at the time the contract was made) of any other party to the contract or of any person acting or appearing or purporting to act for or on behalf of any other party to the contract,
(k) the conduct of the parties to the proceedings in relation to similar contracts or courses of dealing to which any of them has been a party, and
(l) the commercial or other setting, purpose and effect of the contract.
(3) For the purposes of subsection (2), a person shall be deemed to have represented a party to a contract if the person represented the party, or assisted the party to a significant degree, in negotiations prior to or at the time the contract was made.
(4) In determining whether a contract or a provision of a contract is unjust, the Court shall not have regard to any injustice arising from circumstances that were not reasonably foreseeable at the time the contract was made.
(5) In determining whether it is just to grant relief in respect of a contract or a provision of a contract that is found to be unjust, the Court may have regard to the conduct of the parties to the proceedings in relation to the performance of the contract since it was made.
10 General orders
10 General orders
10 General orders
Where the Supreme Court is satisfied, on the application of the Minister or the Attorney General, or both, that a person has embarked, or is likely to embark, on a course of conduct leading to the formation of unjust contracts, it may, by order, prescribe or otherwise restrict, the terms upon which that person may enter into contracts of a specified class.
Part 3 Procedural and other matters
Part 3 Procedural and other matters
Part 3 Procedural and other matters
11 Application for relief
11 Application for relief
11 Application for relief
(1) The Court may exercise its powers under this Act in relation to a contract on application made to it in accordance with rules of court, whether in—
(a) proceedings commenced under subsection (2) in relation to the contract, or
(b) other proceedings arising out of or in relation to the contract.
(2) Proceedings may be commenced in the Court for the purpose of obtaining relief under this Act in relation to a contract.
12 Interests of non-parties to contract
12 Interests of non-parties to contract
12 Interests of non-parties to contract
(1) Where in proceedings for relief under this Act in relation to a contract it appears to the Court that a person who is not a party to the contract has shared in, or is entitled to share in, benefits derived or to be derived from the contract, it may make such orders against or in favour of that person as may be just in the circumstances.
(2) The Court shall not exercise its powers under this Act in relation to a contract unless it is satisfied—
(a) that the exercise of those powers would not prejudice the rights of a person who is not a party to the contract, or
(b) that, if any such rights would be so prejudiced, it would not be unjust in all the circumstances to exercise those powers,
but this subsection does not apply in relation to such a person if the Court has given the person an opportunity to appear and be heard in the proceedings.
13 Intervention
13 Intervention
13 Intervention
The Minister or the Attorney General, or both, may, at any stage of any proceedings in which relief under this Act is sought, intervene by an Australian legal practitioner or agent, and shall thereupon become a party or parties to the proceedings and have all the rights of a party or parties to those proceedings in the Court, including any right of appeal arising in relation to those proceedings.
s 13: Am 2005 No 98, Sch 3.12.
14 Fully executed contracts
14 Fully executed contracts
14 Fully executed contracts
The Court may grant relief in accordance with this Act in relation to a contract notwithstanding that the contract has been fully executed.
15 Arrangements
15 Arrangements
15 Arrangements
In any proceedings in which relief under this Act is sought in relation to a contract, the Court may, if it thinks it proper to do so in the circumstances of the case, and it is of the opinion that the contract forms part of an arrangement consisting of an inter-related combination or series of contracts, have regard to any or all of those contracts and the arrangement constituted by them.
16 Time for making applications for relief
16 Time for making applications for relief
16 Time for making applications for relief
An application for relief under this Act in relation to a contract may be made only during any of the following periods—
(a) the period of 2 years after the date on which the contract was made,
(b) the period of 3 months before or 2 years after the time for the exercise or performance of any power or obligation under, or the occurrence of any activity contemplated by, the contract, and
(c) the period of the pendency of maintainable proceedings arising out of or in relation to the contract, being proceedings (including cross-claims, whether in the nature of set-off, cross-action or otherwise) that are pending against the party seeking relief under this Act.
Part 4 Miscellaneous
Part 4 Miscellaneous
Part 4 Miscellaneous
17 Effect of this Act not limited by agreements etc
17 Effect of this Act not limited by agreements etc
17 Effect of this Act not limited by agreements etc
(1) A person is not competent to waive his or her rights under this Act, and any provision of a contract is void to the extent that—
(a) it purports to exclude, restrict or modify the application of this Act to the contract, or
(b) it would, but for this subsection, have the effect of excluding, restricting or modifying the application of this Act to the contract.
(2) A person is not prevented from seeking relief under this Act by—
(a) any acknowledgment, statement or representation, or
(b) any affirmation of the contract or any action taken with a view to performing any obligation arising under the contract.
(3) This Act applies to and in relation to a contract only if—
(a) the law of the State is the proper law of the contract,
(b) the proper law of the contract would, but for a term that it should be the law of some
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