# Response

## (a)

Classification: unfair

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## (b)

**Controlling statute:** *Competition and Consumer Act 2010* (Cth), Schedule 2 — the **Australian Consumer Law** (ACL).

**Relevant section:** **Section 24 of the ACL** sets out the three-limb test for whether a term is "unfair." A term is unfair if:

1. it would cause a **significant imbalance** in the parties' rights and obligations under the contract; **and**
2. it is **not reasonably necessary** to protect the legitimate interests of the party advantaged by the term (with the burden of proof on that party to rebut this); **and**
3. it would cause **detriment** (financial or otherwise) to a party if applied or relied on.

*(Section 23 is the operative provision that renders such a term void and, following the amendments effective 9 November 2023, also exposes the party that included or relied on the term to civil penalties; but s 24 is the provision that defines the test itself.)*

**Why this clause fails the s 24 test:**

| Limb | Analysis |
|---|---|
| Significant imbalance | The supplier can increase the fee by any amount at any time with zero notice; the consumer bears all the risk of price change with no corresponding right. |
| Not reasonably necessary | A legitimate interest in adjusting pricing could be protected by far less invasive means (e.g., reasonable notice, CPI-linked caps, or a right to exit). |
| Detriment | Unlimited unilateral fee increases without an exit right expose the consumer to direct financial detriment. |

The clause is also illustrative of the type of term listed in s 25(1)(d) (permits one party to vary the terms) and s 25(1)(f) (permits one party to terminate but denies the same right to the other), reinforcing the classification as unfair.