Classification: unfair

(a) Classification: unfair

This clause is unfair. A term is unfair under the test if it (i) would cause a significant imbalance in the parties' rights and obligations, (ii) is not reasonably necessary to protect the legitimate interests of the party advantaged by it, and (iii) would cause detriment (financial or otherwise) to a party if relied on. This clause permits one party (the supplier) to vary the price unilaterally, at any time, in any amount, without notice, while denying the consumer any corresponding right to terminate. That is a paradigm example of an unfair term:

- It creates a significant imbalance: the supplier alone controls the price and the consumer is bound regardless. It corresponds closely to the illustrative "grey list" examples in the statute, in particular a term that permits one party (but not the other) to vary the terms of the contract, a term that permits one party to unilaterally vary the upfront price, and a term that limits one party's right to terminate.
- It is not reasonably necessary to protect any legitimate business interest: an open-ended, no-notice, no-cap pricing discretion goes well beyond what is needed (a transparent, notified variation right with a matching consumer right to terminate would suffice).
- It would cause detriment to the consumer, who could be charged any amount with no notice and no exit.

The combination of unlimited unilateral price variation, no notice, and removal of the consumer's termination right makes this clearly unfair.

(b) Controlling statute and section setting out the test

The controlling statute is the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)). The section that sets out the test for whether a term is unfair is section 24 of the ACL (the three-limb test: significant imbalance, not reasonably necessary to protect legitimate interests, and detriment). Related provisions: section 23 makes an unfair term in a consumer/standard-form contract void, section 25 lists examples of the kinds of terms that may be unfair (the "grey list"), and section 27 deals with the standard-form contract presumption.

## Approach

I treated this as a straightforward application of the Commonwealth unfair contract terms regime in the Australian Consumer Law. Given the facts stipulate a consumer contract and a standard-form contract, the only live question is whether the clause meets the s 24 unfairness test. I applied the three limbs of that test, noted the clause's close match to the s 25 grey-list examples (unilateral variation of price/terms and limiting the right to terminate), and concluded it is unfair. I identified the controlling statute as the ACL (Sch 2 to the Competition and Consumer Act 2010 (Cth)) and the test section as s 24.