46LWhen term in consumer contract or specified trade contract is unfair

1. A term in a consumer contract or specified trade contract is unfair if the court is satisfied that the term—

2. would cause a significant imbalance in the parties' rights and obligations arising under the contract; and
3. is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and
4. would cause detriment (whether financial or otherwise) to a party if it were applied, enforced, or relied on.

5. In determining whether a term of a consumer contract or specified trade contract is unfair, the court may take into account any matters it thinks relevant, but must take into account—

6. the extent to which the term is transparent; and
7. the contract as a whole.

8. For the purpose of subsection (1)(b), a term in a consumer contract or specified trade contract must be presumed not to be reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term, unless that party proves otherwise.

9. For the purpose of subsection (1)(b), and despite anything in section 46M, in relation to contracts of insurance only, the following terms must be taken to be terms that are reasonably necessary in order to protect the legitimate interests of the insurer:

10. a term that identifies the uncertain event or that otherwise specifies the subject matter insured or the risk insured against:
11. a term that specifies the sum or sums insured or assured:
12. a term that excludes or limits the liability of the insurer to indemnify the insured on the happening of certain events or on the existence of certain circumstances:
13. a term that describes the basis on which claims may be settled or that specifies any contributory sum due from, or amount to be borne by, an insured in the event of a claim under the contract of insurance:
14. a term that provides for the payment of the premium:
15. a term relating to the duty of utmost good faith that applies to parties to a contract of insurance:
16. a term specifying requirements for disclosure, or relating to the effect of non-disclosure or misrepresentation, by the insured.

17. In subsection (4),—

    contract of insurance has the meaning given in section 7 of the Insurance (Prudential Supervision) Act 2010

    premium has the meaning given in section 6 of the Insurance (Prudential Supervision) Act 2010

    uncertain event has the meaning given in section 7 of the Insurance (Prudential Supervision) Act 2010.