Classification: unfair

# Response to LAW-0001

This is a benchmarking hypothetical, not legal advice.

## (a) Classification

Classification: unfair

## (b) Controlling statute and section

The controlling statute is the **Australian Consumer Law (ACL)**, which is **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** ("Meaning of unfair"). Section 24(1) provides the three-limb test: a term of a consumer contract or small business contract is unfair if it (a) would cause a significant imbalance in the parties' rights and obligations arising under the contract; (b) is not reasonably necessary to protect the legitimate interests of the party advantaged by the term; and (c) would cause detriment (financial or otherwise) to a party if it were applied or relied on.

(The related provisions sit alongside it: s 23 voids an unfair term in a standard-form consumer/small business contract; s 25 contains the grey-list of example terms; and s 27 deals with standard-form contracts and reverses the onus on whether a contract is standard form.)

## Working

The clause grants the supplier an **unfettered unilateral right to vary the price** ("any time, in any amount, at the supplier's sole discretion, without notice") while simultaneously **removing the consumer's right to terminate** in response to that variation. Applying the s 24(1) test:

- **Significant imbalance (s 24(1)(a)):** The term lets one party change a core obligation (the price) entirely at will, with no notice, and locks the other party in. The consumer carries all the risk with no corresponding right. This is a clear imbalance. It also maps directly onto the s 25 grey-list examples - s 25(1)(d) (a term permitting one party but not another to vary the contract terms), s 25(1)(b)/(c) (unilateral termination/variation rights), and the example of a term permitting one party to unilaterally vary the upfront price.

- **Not reasonably necessary to protect legitimate interests (s 24(1)(b)):** A supplier can protect a legitimate interest in adjusting prices through far less one-sided means (reasonable notice, a stated basis for the change, and a right for the consumer to exit if they do not accept the new price). An unlimited, no-notice, no-exit power goes well beyond what is reasonably necessary. Under s 24(4) this limb is presumed not satisfied unless the supplier proves otherwise.

- **Detriment (s 24(1)(c)):** The consumer can be charged an arbitrarily higher fee at any moment and cannot escape the contract, which is plainly detrimental (financial detriment).

All three limbs are met, so the clause is **unfair** within the meaning of s 24. As an unfair term in a standard-form consumer contract it would be void under s 23 (the rest of the contract continuing if it can operate without the term).

## Note on approach

I treated this as a single, self-contained question under the Australian unfair contract terms regime. I identified the governing instrument (the ACL in Schedule 2 of the Competition and Consumer Act 2010 (Cth)), located the unfairness test in s 24, and applied its three cumulative limbs to the clause's two features (unlimited unilateral price variation plus removal of the right to terminate), cross-checking against the s 25 grey list. The clause fails all three limbs, so it classifies as unfair.