From mobile phone plans to insurance policies and streaming service subscriptions, most Australians encounter adhesion contracts every week—often without realising it. But in 2025, with regulatory changes and increased scrutiny of consumer rights, understanding adhesion contracts has never been more important.
What Exactly Is an Adhesion Contract?
An adhesion contract—sometimes called a ‘standard form contract’—is a legally binding agreement where the terms are set by one party and the other has little or no ability to negotiate. Think of the ‘I agree to the terms and conditions’ box you tick online, or the lengthy loan agreement from your bank. These contracts are designed for efficiency and scale, but they can put consumers at a disadvantage, especially when clauses are buried in fine print.
- Examples: Mobile phone plans, car insurance policies, gym memberships, software licenses.
- Key feature: One party dictates the terms; the other party can only accept or reject them in full.
While adhesion contracts streamline business and consumer transactions, they raise questions about fairness and transparency—issues that have come under the spotlight in recent years.
2025 Regulatory Landscape: What’s Changed?
The Australian Competition and Consumer Commission (ACCC) and ASIC have taken a stronger stance against unfair contract terms in 2025, following amendments to the Australian Consumer Law (ACL) and the Australian Securities and Investments Commission Act (ASIC Act). As of March 2025, penalties for including unfair terms in standard form contracts have increased significantly, with fines reaching up to $50 million for corporations.
- Unfair contract terms are now illegal—not just voidable. Businesses found using them may face court action and substantial penalties.
- Scope widened: The new rules apply to a broader range of small business contracts, not just consumer agreements.
- Greater clarity: The ACCC has published updated guidance on what constitutes ‘unfairness’, including terms that allow one party to unilaterally change contract terms, limit liability unfairly, or prevent the other party from terminating the agreement.
For example, if a gym membership contract allows the company to increase fees without notice or restricts your right to cancel in unreasonable ways, such terms could now be deemed illegal.
What Should Consumers Watch For?
While most Australians don’t have the time (or patience) to read every clause in their contracts, it pays to be vigilant—especially as companies update their templates to comply with new laws. Here are some tips for navigating adhesion contracts in 2025:
- Spot the red flags: Watch for clauses that let the provider change prices or services unilaterally, impose steep penalties for exit, or limit your right to dispute errors.
- Know your rights: Under the ACL, you have protections against unfair contract terms. If you suspect a term is unfair, you can report it to the ACCC or seek legal advice.
- Leverage competition: Providers are under pressure to clean up their contracts. Don’t hesitate to shop around or ask questions—especially if you’re signing a long-term agreement.
- Digital contracts count: Online platforms and app-based services must also comply with Australian law, even if their parent companies are overseas.
In 2025, consumer watchdogs are actively monitoring industries with a track record of problematic contracts—such as telecommunications, finance, and fitness memberships. Recent enforcement actions have seen several companies forced to amend their standard form contracts and compensate affected customers.
Looking Ahead: Why Adhesion Contracts Still Matter
Adhesion contracts are here to stay, but in an era of heightened regulatory scrutiny and empowered consumers, the balance of power is shifting. Businesses can no longer rely on ‘set and forget’ contracts packed with hidden traps, and consumers have stronger protections than ever before.
Whether you’re signing up for a new internet plan, taking out a personal loan, or joining a gym, take a moment to skim the key terms and know your rights. In 2025, a little awareness can save you a lot of hassle down the line.
