Classification: unfair

# Benchmark task LAW-0001 - response

## Approach

This is a benchmarking hypothetical, not legal advice. I read only the work order. The clause and stated assumptions (a consumer contract and standard-form contract) put it squarely inside the Australian unfair contract terms (UCT) regime. I classified the clause against the statutory test for unfairness, then identified the controlling statute and the section that sets out that test.

## (a) Classification

Classification: unfair

## (b) Controlling statute and section

**Statute:** the Australian Consumer Law (the ACL), which is **Schedule 2 to the Competition and Consumer Act 2010 (Cth)**.

**Section that sets out the test for whether a term is unfair:** **section 24 of the ACL**.

Section 24(1) sets the three-limb test: a term is unfair if (i) it would cause a significant imbalance in the parties' rights and obligations arising under the contract; (ii) it is not reasonably necessary to protect the legitimate interests of the party advantaged by the term; and (iii) it would cause detriment (financial or otherwise) to a party if relied on. Section 24(2)-(4) add the supporting machinery (transparency, the contract as a whole, and the presumption under s 24(4) that a term is not reasonably necessary unless the advantaged party proves otherwise).

(The related provisions complete the regime: **s 23** makes an unfair term in a standard-form consumer or small-business contract void, and **s 25** gives a non-exhaustive list of example terms. But the section that *sets out the test* is **s 24**.)

## Working - why this clause is unfair

Applying the s 24(1) test to the clause:

1. **Significant imbalance.** The clause lets the supplier change the price "at any time, in any amount, at the supplier's sole discretion, without notice," and simultaneously strips the consumer of any right to terminate when the price changes. The consumer is bound to a fee the supplier can set unilaterally and without limit, with no exit. That is a substantial one-sided allocation of rights in the supplier's favour. The example terms in s 25 reinforce this: **s 25(1)(d)** (a term permitting one party but not the other to vary the contract) and **s 25(1)(b)/(l)** (unilateral variation, in particular varying the price without a right for the other party to terminate) describe exactly this kind of clause.

2. **Not reasonably necessary to protect a legitimate interest.** A business has a legitimate interest in adjusting prices over time, but that interest can be protected by far less one-sided means (a defined price-change mechanism, advance notice, and a right for the consumer to cancel before an increase takes effect). An unlimited, no-notice, no-exit power goes well beyond what is reasonably necessary to protect that interest. Under **s 24(4)** the supplier is presumed not to have shown reasonable necessity unless it proves otherwise, and nothing here rebuts that.

3. **Detriment.** If relied on, the consumer can be charged an arbitrarily higher fee with no notice and no ability to leave - a clear financial detriment.

All three limbs are met, so the term is unfair within s 24. Because the contract is a standard-form consumer contract, an unfair term is void under **s 23**.

(If the supplier were a financial-services provider, the equivalent regime sits in the ASIC Act 2001 (Cth) with the unfairness test at s 12BG; but on the facts given - a general online subscription business - the controlling statute is the ACL and the test is **s 24**.)