Australian Securities and Investments Commission v PayPal Australia Pty Limited
Citation: [2024] FCA 762
What happened
The Australian Securities and Investments Commission (ASIC) took legal action against PayPal Australia Pty Limited concerning terms in their contracts with small businesses between September 2021 and November 2023. The 'Fee Error Term' required users to notify PayPal of any fee errors within 60 days, or PayPal wouldn’t correct them. Approximately 608,375 Business Account Contracts existed, with about 606,930 being Small Business Contracts. ASIC alleged this term was unfair and void under the Australian Securities and Investments Commission Act 2001 (Cth). PayPal subsequently admitted that the Fee Error Term was an unfair term.
What was decided
The Federal Court declared the 'Fee Error Term' in PayPal’s Small Business Contracts to be an ‘unfair term’ and void, operating under sections 12BG and 12BF of the Australian Securities and Investments Commission Act 2001 (Cth). The court made this declaration based on admissions from PayPal and a joint proposal from both parties. PayPal is now restrained from applying or relying on this Fee Error Term in future contracts. The Court ordered PayPal to pay ASIC’s legal costs, with the amount to be agreed upon or assessed.
What it means for employers
Employers (in this case, PayPal) must ensure contract terms are fair and transparent, especially when dealing with small businesses. Standard form contracts require particular scrutiny. Failing to do so can lead to declarations of unfairness, voiding of clauses, and cost orders against the business. Regularly review contractual terms to comply with legislation like the Australian Securities and Investments Commission Act.
What it means for employees
Employees involved in drafting or reviewing contracts should be aware of consumer protection laws and their impact on small businesses. If you suspect unfair contract terms are being used, report your concerns through appropriate channels. This case highlights the importance of fair business practices and legal protections for smaller entities.
Want this applied to your situation?
Reading the decision is free. FairWork Mate goes further — it reads the full case library and applies precedents like this one to your specific facts, citing the cases as it reasons. General information, not a guaranteed outcome or legal advice.
Every statement above is drawn from the published decision. Read the original here:
https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2024/2024fca0762Want more cases like this?
FairWork Mate tracks Fair Work Ombudsman, Fair Work Commission and Federal Court decisions across Australia. The AI advisor answers plain-English questions grounded on the full corpus — awards cited, industry, penalty amounts and affected employee counts — with a citation to the underlying decision on every answer.
Individual case summaries on this site are free. Full-corpus advisor access is a paid product — Business Solo from $99/mo, 50% off your first 3 months for the first 100 signups.
Get notified on new Fair Work cases
Free email alerts when we publish new underpayment decisions, penalty orders, and workplace law updates.
Free forever. No spam. Unsubscribe anytime.
This summary was drafted from the published decision and reviewed before publishing. It is general information, not legal advice. For your specific situation, speak to the Fair Work Ombudsman (13 13 94) or a qualified lawyer. About these summaries & corrections →