Variations to contracts

Complainants often approach the TIO to complain about providers changing the terms and conditions of their agreements. This most often involves a provider increasing prices or introducing new fees or service restrictions during a fixed term contract.

The Trade Practices Amendment (Australian Consumer Law) Act (No.1) 2010 contains provisions that address the use of unfair contract terms in consumer contracts. Examples of unfair terms may include terms that permit one party unilaterally to vary the terms of the contract, the upfront price payable under the contract without the right of the other party to terminate the contract, or the characteristics of the goods or services to be supplied under the contract. 

Under Clause 5.1.3 (d) (ix) of the Telecommunications Consumer Protections (TCP) Code (PDF 352kb), when assessing whether a contract term is unfair it is relevant to consider whether, subject to the exceptions in Clauses 5.1.5 (g) to 5.1.5 (l):

the object or effect of the term is to permit the Supplier to unilaterally amend or vary the characteristics of goods or services, including price, in a Consumer Contract with a Fixed Contract Period without:

1. at least 21 days Written Notice to the Consumer, and
2. offering the Consumer the right to terminate the Consumer Contract within 42 days of the date of the notice without incurring charges, other than usage or network access charges to the date the Consumer Contract ends and outstanding amounts for installation or for equipment compatible with other Suppliers' services.

In considering complaints of this type the TIO will have regard to the Trade Practices Amendment (Australian Consumer Law) Act (No.1) 2010, whether the variation satisfies the notice and termination option requirements in clause 5.1.3(d) of the TCP Code and all relevant circumstances.

Although each case will be considered on its own particular facts, it is unlikely that the TIO would investigate a complaint further after it has been established that the variation complies with clause 5.1.3 (d) of the TCP Code and the variation is not contrary to any express undertakings given by the supplier at the time the customer entered into the fixed term contract.

References:

• Trade Practices Amendment (Australian Consumer Law) Act (No.1) 2010
• Telecommunications Consumer Protections Code PDF 352kb

Updated on: 6 July, 2010

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