CRM contract traps: auto-renewal, price changes and the unfair contract terms law

The CRM contract terms that most often cost small businesses money are automatic renewal with a long or awkward notice period, price changes the vendor can make on notice, no seat reductions during the term, limited data export, and one-sided liability clauses. Under the Australian Consumer Law, standard-form contracts with a small business (fewer than 100 employees, or annual turnover under $10 million) are protected by the unfair contract terms law, and since 9 November 2023 using or relying on an unfair term is prohibited and can attract significant penalties. That does not make every tough term unfair, so the best protection is still to read and negotiate before you sign.

This guide is part of why CRM rollouts fail. It is general information, not legal advice.

The terms to find in every CRM contract

Most CRM subscriptions are accepted online through a master subscription agreement, an order form, and policies incorporated by link (acceptable use, privacy, data processing, service levels, support). Read all of them; the important terms are often in the linked documents.

Term	What to look for	Why it matters
Term and renewal	Length, auto-renewal, renewal term length	An annual plan may renew for another year automatically
Notice to stop renewal	Notice period (e.g. 30, 60 or 90 days), method (email, portal, written)	Missing the date commits you to another term
Price changes	During the term; at renewal; cap or "then-current list price"	Unbudgeted increases; see the renewal uplift example
Variation of terms	Vendor can change the agreement by posting a new version	Features, limits or prices may change without your agreement
Seat and tier changes	Can you reduce seats or downgrade mid-term?	Paying for unused seats
Suspension	When the vendor can suspend access (late payment, suspected misuse)	Losing access to customer data at a critical time
Data export and deletion	What you can export, in what format, for how long after termination	Exit costs; see data export and exit
Service levels	Uptime commitment, service credits, support hours	See SLAs, uptime and support
Liability	Caps (often fees paid in 12 months), exclusions for data loss	Limited recovery if the vendor causes a breach or loss
Data protection	Hosting location, sub-processors, breach notification	Privacy obligations; see the Privacy Act guide
Governing law and disputes	Which country's or state's law; arbitration	Overseas law makes disputes harder and costlier

The unfair contract terms law

Who is protected. A contract is a small business contract if it is a standard-form contract for goods or services (or land), and at least one party employs fewer than 100 people or has annual turnover under $10 million. Most online CRM subscriptions are standard-form contracts. The earlier limits on contract value were removed from 9 November 2023.

What makes a term unfair. A court considers whether the term would cause a significant imbalance in the parties' rights and obligations, whether it is not reasonably necessary to protect the legitimate interests of the party relying on it, and whether it would cause detriment if relied on. Transparency and the contract as a whole are taken into account.

Examples of terms that may be unfair, depending on the circumstances:

the vendor can change the price or the service unilaterally while you cannot exit;
the vendor can terminate at will but you cannot;
automatic renewal without a reasonable opportunity to exit;
penalties for you but not for the vendor;
limiting the vendor's liability for its own failures while you remain fully liable.

Consequences. Since 9 November 2023, it is prohibited to propose, include or rely on an unfair term in a small business contract. Courts can impose penalties; for companies the maximum is the greatest of $50 million, three times the benefit obtained, or, if the benefit cannot be determined, 30% of adjusted turnover during the breach period. Unfair terms are void, and courts have wider powers to make orders. The ACCC enforces the law.

Main subject matter and upfront price are excluded from the test: a CRM's headline price for the service is not itself open to challenge as unfair, but a term allowing the vendor to change that price later can be.

Consumer guarantees for business buyers

The Australian Consumer Law's consumer guarantees can also protect businesses: a purchase of goods or services costing $100,000 or less (or of a kind ordinarily acquired for personal or household use) is generally treated as a consumer purchase. Services must be provided with due care and skill and be reasonably fit for a purpose you made known. If a CRM service has a major failure, you may be entitled to cancel and get a refund for the unused portion. Check the ACCC's guidance for the conditions.

Subscription traps: new law from 1 July 2027

Separate from the unfair contract terms law, the Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 (No. 64, 2026, assented to 6 July 2026) starts on 1 July 2027. It adds rules for subscription contracts that renew automatically or roll on after a free or discounted period: the supplier must give prescribed information before and during the contract, and must provide a way to cancel that is easy to find and straightforward, including an online way if you signed up online. These subscription rules cover small business subscribers on standard-form contracts (fewer than 100 employees or turnover under $10 million), not only consumers. They apply to contracts made from 1 July 2027, and to existing contracts once they are renewed, extended or varied after that date. The Act's general ban on unfair trading practices, by contrast, protects individual consumers and does not apply where the purchase is made in the course of carrying on a business. Much of the detail (what information, when) will be set by regulations, so check the ACCC and Treasury websites closer to the start date. Until then, rely on the contract terms and the existing law.

What to negotiate

Small businesses can often negotiate more than they expect, particularly on annual or larger deals.

Renewal notice: the vendor must remind you 30–60 days before renewal; you can give notice by email.
Price cap: renewal increase capped at a fixed percentage or CPI; first-year discount carries forward.
Seat flexibility: reduce seats by a set percentage at renewal, or move to monthly.
Exit for change: right to terminate without penalty if the vendor materially changes the service, terms or price.
Export: full export of all data in standard formats, at no extra charge, for at least 30–90 days after termination.
Breach notice: the vendor will tell you promptly about incidents affecting your data.
Australian law: at least for disputes with an Australian entity.

Get any agreed changes in the order form or a signed side letter; a sales email may not override the terms.

Illustrative cost of a missed notice date

A 10-seat business on an annual plan at an illustrative $70 per seat a month decides to switch, but misses the 60-day notice. The plan renews for 12 months: 10 × $70 × 12 = $8,400 committed, plus the new CRM's cost if it switches anyway. A diary reminder 90 days before renewal would have avoided it.

Frequently asked questions

Is auto-renewal itself unfair?

Not necessarily. Whether a term is unfair depends on the whole contract, its transparency and whether it is reasonably necessary. Clear notice and an easy way to opt out reduce the risk.

Can I get out of a contract with an unfair term?

The unfair term is void, but the rest of the contract usually continues. Seek advice, raise it with the vendor, and consider a complaint to the ACCC or help from a small business commissioner.

Does this apply to overseas vendors?

The Australian Consumer Law can apply to overseas businesses dealing with Australian customers, but enforcing rights against them is harder. The governing law clause matters.

Where can I get free help?

The Australian Small Business and Family Enterprise Ombudsman and state small business commissioners can help. See complaints, disputes and official sources.

Sources

Australian Competition and Consumer Commission — unfair contract terms, consumer guarantees for businesses, unfair trading practices updates
Australian Small Business and Family Enterprise Ombudsman — dispute support and contract guidance
Federal Register of Legislation — Competition and Consumer Act 2010, Schedule 2 (Australian Consumer Law)
The Treasury — consumer law reforms, including unfair trading practices
business.gov.au — contracts and agreements for small business